December 15 vs. December 16 - Homepage | Copernicus · December 15 vs. December 16 and how the...
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December 15 vs. December 16and how the energy market behaved»
C3S symposium for the Energy Sector
Dr. Matthias Piot, Dr. Christoph ElsässerEnBW AG, Analyses and Evaluations TeamBarcelona, 22.02.2017
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EnBW AG - Trading
EnBW Trading
Traded volume 2016Number of trades: 380.000 (17% OTC)Traded power volume: 411TWhTraded gas volume: 788TWhNearly 170 national and international partners
EnBW AG
Production portfolio
Total capacity: 13GWincl. renewables: 3GWincl. wind power: 580MW
Direct marketing:Portfolio: doubled within a year to 4.6GW
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What a trader sees…
Source: Thomson Reuters
Information platforms like Reuters, Bloomberg…
+
T°C, wind, solar, demand, …
Public Information: Independent weather providers:
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Weather signals in December 2015
Issued in Oct‘15
Issued in Nov‘15
Issued in Dec‘15
Seasonal predictions
Source: CFSv2, NCEP
A steady, warm signal throughout Europe was captured 2 months in advance:
Sub-seasonal predictions
Issued on Nov 25th
Observations:
Very warm / windy December:Germany: +3,5°C Wind: +3 GW (+20%)Stuttgart: +5,2°C
→ Good performances of S2S-Signals
Source: WSI
Week 3
Week 4
Week 5
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Question mark: Super El Nino 2015 and T°C
Generally accepted: Correlation El Nino / NAO ≈ 0,2 (weak)
How do climatologists interpret this signal? Re-evaluation of ENSO-effect on European weather?
High correlation ENSO vs. T°C in northern Hem. (0,8)
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Weather signals in December 2016
Issued in Oct‘16
Issued in Nov‘16
Issued in Dec‘16
Seasonal predictions
Source: CFSv2, NCEP
Volatile and controversial signals for temperatures and wind generation:
Sub-seasonal signals Observations:
Suppressed Jet Stream in December:Germany: -0,1°C Wind: -6 GW (-40%)Stuttgart: -0,7°C
→ Poor performances of S2S-Signals, consideration of teleconnections?
Source: WSI
Issued on Nov 30th
Week 3
Week 4
Week 5
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December 2016Teleconnection signals
Stratospheric polar vortex
Situation in the stratosphere not well integrated by current models?
Can we enhance the integration/understanding of teleconnection signals in S2S-models?
Earliest SSW on record
Courtesy: MetDesk
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Impact on the Energy MarketsDec15 vs. Dec16
Evolution of weather has a direct and significant impact on volatility and trend in energy markets
2015:- Low volatility- Clear downward market trend- Low trading interest
2016:- Boost in volatility- Uncertain market view (more usual)- Exacerbated by French nuclear fleet issues
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Our message…
December 2015: very warm and windy
- Well predicted by S2S-models
- Induced a low trading interest (low price volatility) and a steady price decline
December 2016: rather calm but also more uncertain
- High model uncertainty even just before the start of month
- High price volatility with ever changing price direction
Significant relationship between S2S-model output and market behavior
Performances of S2S-models is key to trading and portfolio management success
Model consistency and performances need improvement to reinforce growing trust and use from the energy sector