Normal Weather vs. 10 year Average – Significant impact to Gas and Power Markets

Normal Weather vs. 10 year Average – Significant impact to Gas and Power Markets

We are investigating “normal” weather.   Our normal weather came from NOAA.  According to NOAA, “Climate Normals are the latest three-decade averages of climatological variables including temperature and precipitation. This product is produced once every 10 years. The 1981–2010 U.S. Climate Normals dataset is the latest release of NCDC’s Climate Normals.”  In the last 10 years, not many places have been close to normal.  The trend in both HDD and CDD shows to be warmer over the last 10 years as compared to normal.  More CDD and less HDD are observed when comparing to normals.

The 10 year average is clearly warmer than the NOAA normals.   The impact on our base case in our Power Market Analysis (PMA) product shows a significant impact on the power markets.  This translated to natural gas demand in the power sector rising 8% compared to the base case for this summer.  Winter is essentially the same.

Power prices are significantly impacted by the weather change in certain regions.  The below figures are screenshots which come from our online interface for our Power Market Analysis (PMA) subscribers.   Each day the model dispatches the entire N. America based on the latest future markets price for coal and gas.  Daily files are produced each morning similar to the above graphs.  Plus the online interface allows users to quickly compare various runs.  In this case, we are comparing the 10 year average weather vs. the Normal weather supplied by NOAA.


Many more regions are available to compare.  In addition to power prices, there are comparison available for coal and gas consumption and input price comparison.  Easy drop downs allow one to see how the future markets have impacted the power markets.  PMA subscribers get access to the files including a complete analysis of 2015 and 2016 comparing the NOAA normals vs. 10 year average.

Soon, PMA subscribers will get a complete analysis of the last 10 year weather.  Each year will be individually analyzed allowing subscribers to be able to choose analog years to represent the forecast.

PMA subscribers get the online access, the daily files, and the study files.   In addition, prime members receive-at no additional cost-reports such as the Summer 2014 Outlook report , the recent briefing on what is causing the gas demand drop, and where it is coming from.  Subscribers also have the opportunity for free private consultations.  Discussions can range from answering more detailed questions on the studies to discussing potential scenarios of the future.

Please contact me to schedule an online demo or 614-356-0484

Your Inspired Energy Consultant,



David K. Bellman
Founder & Principal
All Energy Consulting LLC
“Independent analysis and opinions without a bias.”

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