WORKSHOP ON ALTERNATIVE CLIMATE NORMALS AND IMPACTS TO THE ENERGY INDUSTRY

What: A total of 50 participants representing energy load forecasters, state regulators, federal climate scientists, and others met to discuss the current use of climate normals by the energy industry and the industry's need for alternative climate normals.

When: 24–25 April 2012

Where: Asheville, North Carolina

The National Oceanic and Atmospheric Administration (NOAA)'s National Climatic Data Center (NCDC) issued its 1981–2010 Climate Normals in July 2011. The normals are 30-yr averages of climatological parameters, including temperature and precipitation, and they are among the most popular and widely used of NCDC's products. NOAA's climate normals are used in many applications across a number of economic sectors. In the energy industry in particular, they are used in the regulation of energy companies (including natural gas and electricity companies), energy load forecasting, determining building design standards, and many other applications.

Over the last decade, NCDC has been steadily and deliberately expanding its proactive engagement with representatives from numerous economic sectors. One example of this interaction has been a sustained dialogue on climate normals with the energy industry, with extensive support from the American Meteorological Society's (AMS) Energy Committee. NCDC's goal has been to assess the use of climate normals by the energy industry and its need for (and receptivity to) alternatives to NOAA's traditionally defined climate normals.

This engagement of the energy sector culminated in the Workshop on Alternative climate normals and Impacts to the Energy Industry, held in the spring of 2012. A primary goal of this workshop was to recommend specific alternative climate normals for industry use from the options outlined by Arguez and Vose (2011, hereafter AV11), including the methods described by Livezey et al. (2007, hereafter L07)—see “Examples of potential new climate normals” for definitions of these options. The energy industry was a natural partner for this discussion because of its breadth and impact to the U.S. economy, and because the industry as a whole is a major user of NOAA's climate normals.

EXAMPLES OF POTENTIAL NEW CLIMATE NORMALS

According to AV11 and L07 and in accordance with user feedback during the workshop, the following potential new climate normals could be used by the energy industry as supplementary products to NOAA's traditionally defined 30-yr climate normals products:

  • N-yr averages

    Averages of the most recent 10, 15, and 20 years.

  • Optimal climate normals

    Averages of the most recent N years, where N is determined by time series characteristics (e.g., slope).

  • Hinge fit

    A time-dependent normal computed using least squares regression with a hinge point. The fit is a constant value before the hinge point, and a straight line (with positive or negative slope) thereafter.

  • Spectral filter

    A time-dependent normal computed using a 31-point running mean in the spectral domain.

  • Weighted 30-yr average

    An average of the most recent 30 years that gives extra weight to more recent years.

  • Centered 30-yr average estimate

    A 30-yr average computed using the most recent 15 years of observations and a forecast of the next 15 years.

  • Climate-model-projected future normal

    A forecast of future climate normals based on downscaled climate model projections.

CLIMATE NORMALS CURRENTLY USED BY THE ENERGY INDUSTRY.

Expertise in climate science and statistics runs the gamut across the industry, as does the use of NOAA's climate normals. Many companies voluntarily use NOAA's climate normals for a plethora of applications, such as energy demand modeling, considering the NOAA seal of approval to be the gold standard. In some cases, their use is mandated in regulatory settings by the letter of the law. At the other extreme, some energy companies acquire data directly from NCDC and compute large suites of climate normals on their own. In many instances, these companies compute 30-yr normals to be consistent with the NOAA standard. The 30-yr standard itself derives from an international agreement (WMO 1989).

INDUSTRY NEEDS FOR ALTERNATIVE CLIMATE NORMALS.

The energy industry is a capital-intensive sector on the front lines of adapting to climate change. Extensive anecdotal evidence suggests the industry is already feeling the effects of climate change and considering climate change in long-term decision making. For example, higher temperatures reduce transmission capabilities because of line sag and transformer failure. In addition, per capita demand for natural gas generally decreases as cold-season temperatures rise. As discussed by AV11 and L07, climate change may compromise the utility of traditional NOAA climate normals, which are updated once per decade, prompting many in the energy industry to use shorter-period averages or develop other alternatives. With this in mind, workshop participants reached broad consensus on a number of findings and recommendations to guide the development of new climate normals:

  • 1) NOAA is strongly encouraged to develop alternatives to its traditional climate normals. Furthermore, the energy industry is comfortable with NOAA providing multiple types of climate normals, including the different methods outlined in AV11 and L07 (see sidebar), updated annually. To facilitate their widespread adoption by industry, these new normals should become part of the official climate normals product suite rather than be considered “experimental” or called “alternatives” (in contrast to the title of the workshop).

  • 2) NCDC should provide easy access to all climate normals products from the NCDC website. The new Climate Data Online system is a good start but does not go nearly far enough.

  • 3) To the extent possible, climate normals should be based on homogenized climate data [i.e., data that have been adjusted for historical changes in station location, temperature instrumentation, observing practice, and siting conditions, per Menne et al. (2009)]. This is already done at the monthly time scale, and bias-adjusted daily normals are highly recommended as a next step.

  • 4) High-quality hourly data and products (including hourly climate normals) are a high priority for the industry, as are daily means computed from hourly observations rather than the average of the daily maximum and minimum. There is particular interest in 10-yr hourly climate normals, as this would cover Automated Surface Observing System (ASOS) stations that went online in the 1990s.

  • 5) NOAA should provide users with guidance on which normals to use for various planning horizons.

  • 6) These new products need to be properly communicated to the energy industry and the general public, requiring a robust outreach, education, and communications effort.

GOING FORWARD.

NCDC plans to move forward on this effort, guided by the recommendations listed above. A webcast will accompany the rollout of these new climate normals products when they are made available. Engagement with the energy industry and other economic sectors will continue— one way recommended during the workshop is to write articles in industry journals and newsletters. Other stakeholders and facilitators, such as state climatologists, will be engaged as well for feedback and help in educating the public. NCDC will also seek partnerships with industry and private sector solution providers as opportunities arise.

REFERENCES

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