The results of annual survey of rates of return on equity authorized for major electric and natural-gas utilities—based on a sample of the retail rate cases conducted by state public utility...
Guessing Mother Nature's Next Move
What can be done to improve weather prediction and load forecasts?
Weather forecast error, whether large or small over a year, can result in substantial added costs to energy organizations. With today's movement toward real-time pricing and sub-hourly markets, it is critical to be as accurate as possible with load forecasts.
Short-term load forecast error ( i.e., percent variations high and low within a four-day period) typically is caused by load measurement error, weather forecast error, and load forecast model error.
Benefits of improving the day-ahead weather and load forecast by just 1-degree Fahrenheit include:
- About $20 million to $25 million per year for a Northeast regional transmission authority; and
- About $1 million to $2 million per year for a large regional distribution company.
Con Edison reported that its earnings per share in 2003 vs. 2002 were positively affected by $0.15 per share. Earlier it reported -$.05 earnings per share due to weather effects-demonstrating that over a short period of time, earnings can swing from -$11 million to +$36 million-a $47 million shift.
NOAA Research: Looking for Diamonds in the Data
What can be done to reduce forecast error, and what are the costs/benefits in making these improvements? 1 NOAA sponsored three projects conducted by SAIC that benchmarked the accuracy of energy organization weather and load forecasts and estimated the value of a 1-degree improvement in forecast accuracy on selected energy enterprise operations. The case study covered two regional transmission organizations interested in short-term ( i.e., less than five days) forecasting issues and two distribution utilities providing both natural gas and electricity. After discovering the source of the error and the cost, NOAA determined the economic value of reducing weather and load forecast error.
Effects of the California Delta Breeze
Not many energy systems have a weather phenomenon that can result in a 4,000-MW shift in a very short period of time. In summer, Northwest winds, west of the Pacific coastline, are drawn into the interior through the Golden Gate and over the lower portions of the San Francisco Peninsula. Immediately to the south of Mount Tamalpais, the winds accelerate considerably and come more nearly from the West as they stream through the Golden Gate (see Figure 1) . This channeling of the flow produces a jet that sweeps eastward but widens downstream, producing southwest winds at Berkeley and northwest winds at San Jose; a branch curves eastward through the Carquinez Straits and into the Central Valley.
Figure 2 shows the possible error that may occur when a delta breeze abruptly stops and weather models underforecast temperature, causing load shortfalls. The delta breeze is strongly influenced by large-scale synoptic weather patterns that move into California from the North Pacific Ocean.
The analysis attempted to build a better predictive