495
8.
Case studies from the energy industry
Weather can be a significant “tipping point” between: cost effective and
non-cost effective energy infrastructure operations; reliable and unreliable
operations; and, periods where emphasis is placed on either supply options
or demand options. With greater uncertainty being introduced in many facets
of energy supply chain delivery, load optionality and the use of weather
related derivatives are becoming increasingly important.
Weather information is critical to different participants in the electric
energy value chain. One example concentrates on demonstrating the value of
improved forecast information to major energy operators in the Northeast
U.S. and in California. To regional transmission organizations such as the
New England ISO and the California ISO, both long range and short-range
forecasts are critical to evaluating the ability of the system to deliver the
power needed for weather sensitive loads. Each of the ISOs is responsible
for 1) operating the regions built power system—a power grid of generators
and high voltage transmission lines, and 2) administrating the regions
wholesale electricity marketplace. The mission is to ensure a reliable power
system for customers from the Northeast and California guaranteeing the
equal access to electricity and transmission systems. They oversee the
operation of a fair, efficient wholesale electricity market.
For local distribution utilities, such as Consolidated Edison of New York
or San Diego Gas and Electric, it is critical to know about wind and ambient
weather conditions so that an evaluation of the adequacy of its back up
power and local distribution system substation capability during peak
periods can be assessed. This information is also crucial for the major energy
users, like the State University of New York system, which has the
responsibility of purchasing gas and electricity for over 30 campuses.
9.
Method of assigning a value to the information
product: The industry trial or beta test
There are many approaches to estimating value of information from
global observing systems. The first is through a cost benefit analysis
approach, examples of which have been done on a number of observing
systems in various countries. However, this method often underestimates the
value particularly if the product is new or not recognized as useful by the
customer. The second, rather different, but complementary approach is
through an “Industry trial” or “Beta Test”. It is a proactive approach where a
Business End Use Partner and an Information Product Provider team to run
an information product “performance assessment” in real life operations.
Here, the environmental information product from the observing system is
inserted into an operational business model and is transformed into a
business or policy decision tool (i.e. demand forecast). The business models
,
OCEAN FORECAST FOR ECONOMIC ADVANCEMENT
8.
Case studies from the energy industry
Weather can be a significant “tipping point” between: cost effective and
non-cost effective energy infrastructure operations; reliable and unreliable
operations; and, periods where emphasis is placed on either supply options
or demand options. With greater uncertainty being introduced in many facets
of energy supply chain delivery, load optionality and the use of weather
related derivatives are becoming increasingly important.
Weather information is critical to different participants in the electric
energy value chain. One example concentrates on demonstrating the value of
improved forecast information to major energy operators in the Northeast
U.S. and in California. To regional transmission organizations such as the
New England ISO and the California ISO, both long range and short-range
forecasts are critical to evaluating the ability of the system to deliver the
power needed for weather sensitive loads. Each of the ISOs is responsible
for 1) operating the regions built power system—a power grid of generators
and high voltage transmission lines, and 2) administrating the regions
wholesale electricity marketplace. The mission is to ensure a reliable power
system for customers from the Northeast and California guaranteeing the
equal access to electricity and transmission systems. They oversee the
operation of a fair, efficient wholesale electricity market.
For local distribution utilities, such as Consolidated Edison of New York
or San Diego Gas and Electric, it is critical to know about wind and ambient
weather conditions so that an evaluation of the adequacy of its back up
power and local distribution system substation capability during peak
periods can be assessed. This information is also crucial for the major energy
users, like the State University of New York system, which has the
responsibility of purchasing gas and electricity for over 30 campuses.
9.
Method of assigning a value to the information
product: The industry trial or beta test
There are many approaches to estimating value of information from
global observing systems. The first is through a cost benefit analysis
approach, examples of which have been done on a number of observing
systems in various countries. However, this method often underestimates the
value particularly if the product is new or not recognized as useful by the
customer. The second, rather different, but complementary approach is
through an “Industry trial” or “Beta Test”. It is a proactive approach where a
Business End Use Partner and an Information Product Provider team to run
an information product “performance assessment” in real life operations.
Here, the environmental information product from the observing system is
inserted into an operational business model and is transformed into a
business or policy decision tool (i.e. demand forecast). The business models
,
OCEAN FORECAST FOR ECONOMIC ADVANCEMENT