How The Weather Affects Power Traders - MetDesk

**Ed Porter** (0:00)
I'm your host, Ed Porter. Welcome back to Transmission.
There's an El Nino building in the Pacific that some models say could be the biggest in a century. That's warm water off the coast of South America. So why does it matter to a power trader in Europe? Because weather is the input the entire energy system runs on. And this episode follows the chain from sea surface temperatures all the way to power prices. Dunkelflauters, French nuclear shutting down when the rivers run too hot, AI models versus human forecasters. My guests are Emma Patmore and Matt Dobson, meteorologists from MetDesk, the people who turn the weather forecast into something an energy trading desk can actually act on. Want to know what the next Dunkelflauter could do to German power prices? Ask Ko, Modo Energy's AI analyst, link below. And if you're not already, make sure to give us a rating and follow wherever you listen. Let's jump in.
Hello, both. Welcome to Transmission.

**Emma Patmore** (1:02)
Thank you for having us.

**Matt Dobson** (1:03)
Yeah, it's great to be here, Ed.

**Ed Porter** (1:04)
Our pleasure to have you on. I've been wanting to do a weather episode for ages and now is finally the chance. So, Matt, I'm going to come to you first. What does everyone get wrong about weather forecasting?

**Matt Dobson** (1:17)
Okay, so weather forecasting is a complex science. There's lots of variables at play. The atmosphere is a chaotic system. I think it's only in terms of the energy industry.
One of the things I feel is that they assume that forecast skill or predictability is static. So a day ahead forecast will always have a certain element of skill. Trying to predict, say, a month, three months ahead, will have a certain level of skill. So it's that kind of myth that we're trying to break down when we're consulting with clients.
The variability in skill is quite large. Sometimes predicting a day ahead is easy. Other times it can be very, very challenging. And likewise, a seasonal forecast, sometimes there are windows of opportunity. And that's what we try and get into energy traders, energy analysts, heads that there can be these opportunities to predict maybe four months ahead, quite skillfully, but not all the time.

**Ed Porter** (2:05)
Okay. Well, that's a really obvious question is when you're talking about skill, do you mean the success of the thing that you're doing? So let's say the day before you say the wind speed is going to be 15 meters per second. And then we get into that day, like, what is a good skill? What is a good outcome? Is it sort of the accuracy in sort of 10% away from that? Or like, do you feel like you could predict it down to something more narrow?

**Matt Dobson** (2:30)
That's right. I mean, obviously, wind is a little bit more challenging than temperature to predict. So for example, a day ahead wind forecast, let's say 80% of the time, the arbitrary figure, you should be within maybe 10, 15% quite commonly. But now and again, you can get weather patterns that can introduce uncertainty and chaos into the pattern. For example, an area of low pressure, that's bad weather, that's cloud, that's wind, that's rain.
If that tracks in a slightly different position, you can end up having maybe 30 or 40% less or more wind than if it tracks maybe slightly. We're talking like miles here, 50 mile north, the low pressure could bring a lot more wind, 50 miles south, it could bring a lot less wind. So these are the events we watch for to give clients an area of idea of risk. And likewise, temperature, trying to forecast that maybe a month ahead. Now and again, there are these windows of opportunity, but wind is harder to predict than temperature.

**Ed Porter** (3:19)
So your list of like what's easy to predict, what's hard to predict, temperature is sort of relatively easy, and then kind of like you're moving towards wind is slightly harder. Where do things like solar fit into that?

**Matt Dobson** (3:28)
Yeah, I think relatively is a good word. I mean, there's always opportunities to get, you know, for the weather to be wrong or rather our forecast to be wrong and the weather to do something different. But temperatures are more sort of evenly spread parameter, if you like, compared to wind. And wind can be affected by lots of different things like topography and, for example, individual weather systems.
Solar, that can be easy sometimes, but it is affected by things like snowfall. You're thinking about solar generation. You're thinking about solar panels. How can the solar panels be messed around with by other things? So, for example, dust from the Sahara, believe it or not, can get blown up towards Europe.