Weather Data Is the Next Smart Grid Opportunity

For much of the world, the day to day weather is not much more than a trivial concern with respect to our day to day decisions. Do I need to grab an umbrella before heading to work? Should I ride my bike or take the car? However, knowing even just a little about what happens in the atmosphere each day can have a substantial monetary payoff when it comes to the smart grid and clean energy sectors, and which will be felt across the spectrum from the individual consumer all the way to the performance of entire industries.

The relationships between weather and energy demand are obvious and well known. A hot stretch during the summer months will result in an elevated electricity load to keep air conditioners running. It follows that a cold winter will be accompanied by higher draws on natural gas, coal and heating oil stocks. In each of these cases, higher burn rates of fossil fuels equal higher concentrations of pollutants emitted to the atmosphere.

As a true smart grid is not a single technology but rather an ensemble of existing and forthcoming tools and services, the incorporation of better demand anticipation in cities with high population density can translate to more efficient use of raw materials like natural gas, coal and heating oil. The financial benefit associated with more efficient use of these resources can then be realized in two ways: first for the consumer and second for utilities.

For the consumer, optimizing the thermostat based on a combination of hourly temperature outlooks coupled with actual requirements (ie., when will we actually be in the building requiring the energy) can lower consumer’s energy bills. At the same time utilities that have a better handle on when and where the peak demand will occur can manage their raw material supply chain with better results, which has a direct line to improved margins. This is a key step in proactively reducing emissions without waiting for a regulation to attempt to enforce the same outcome.

As private and government weather forecasting services are continuously improving their projections of short term weather pattern, the return on the investment for smart grid developers can be seen in days, not seasons. It should be noted that using traditional forecasting techniques, the skill level associated with an hourly forecast for anything beyond a 8-10 day window still can be a limitation. However, there has been a significant improvement in hourly outlooks for days 1-7.

Even an incremental improvement in forecasting the hourly temperature, wind or solar profile up to one week out can result in significant savings across the grid, ranging from load assessment/fuel use, increased efficiencies for fuel blends with respect to utilities that incorporate intermittent supply sources (wind, solar), operational logistics and transmission savings, and optimizing preparation activities in the anticipation of severe weather events (heatwaves, cold snaps, etc). And these are only a few examples.

The level of technological sophistication of the grid operators and the degree to which the consumer is open to participate by sharing information regarding their consumption patterns will also enhance the financial and environmental benefits to all parties involved.

This column is just a starting point for discussions that examine weather, sensors, data, networks, and their combined influence on commerce, with particular focus on the effects these technologies will have on energy consumption. Over the last couple of years, there has been a heightened interest in this area from the applied research side, evidenced by new topics and sessions presented at the annual conferences of the American Geophysical Union, the American Meteorological Society, and others. Investors, too, have been backing companies in the weather data space, including recently Google Ventures, Khosla Ventures and NEA’s support of weather insurance company WeatherBill.

My hope is that the weather space can capitalize on the emergence of tools and techniques which fall under the ‘big data’ umbrella, in the process, bringing some of these discussions to a broader audience while also helping readers understand how closely related their lives and decisions are to conditions in the atmosphere.

To learn more about smart grid opportunities come to our Green:Net event on April 21 in San Francisco.

Michael Ferrari is the VP, Research for Weather Trends International

Image courtesy of Ell Brown.