Gas Demand Forecasting With CWV (Composite Weather Variable)

The weather is a primary driver of gas demand fluctuations in the U.K. In this story, discover how Brook Green Supply incorporates Composite Weather Variables (CWV), calculated by Meteomatics, to accurately forecast demand and enhance trading decisions.

Brook Green Supply Delivers Innovative Solutions to Heavy Energy Consumers in the UK

Brook Green Supply (BGS) is dedicated to delivering energy supply and innovative solutions to industrial and commercial energy consumers throughout the United Kingdom. BGS guides clients through the transition towards a low-carbon future, ensuring cost management and risk mitigation at every step.

BGS is part of the CFP Energy group, their expertise lies in carbon trading, allowing them to assist clients by optimizing their energy consumption amidst the challenges of an increasingly volatile and intermittent energy landscape.

Brook Green Supply Needs Reliable Local Gas Demand Forecasting

In the U.K., gas demand forecasts are generated for each of the 13 local distribution zones, encompassing residential, commercial, and most industrial consumption. These forecasts consider various factors, including weather, local demand patterns, historical data, economics, government policies, and fuel prices.

Within each local distribution zone, meters or gas off-takes are categorized by consumption levels, referred to as “load bands.” These bands split into two main categories: non-daily metered (NDM) and daily-metered (DM).

Non-daily metered customers are those whose gas consumption isn't measured on a daily basis, resulting in less detailed usage data compared to daily metered customers. As the UK Gas Market is settled daily, there is need to allocate NDM customer usage on a daily basis.

Composite Weather Variables as a Reliable Proxy for Gas Demand

Composite Weather Variable (CWV) is a key parameter in the “NDM Algorithm”, which is utilized to estimate daily gas demand for non-daily metered customers. CWV combines various weather factors that impact gas demand, into a single variable. The formula includes the following components: effective temperature, pseudo seasonal normal effective temperature, wind chill, cold weather upturn, and summer cut-off.

Here's why CWV is a good proxy for gas demand:

• Effective Temperature: This parameter represents the real impact of temperature on gas consumption. It considers not just the temperature itself, but also factors like humidity and wind speed, which can affect how much gas people use for heating. For instance, during very cold and windy days, the effective temperature may be lower than the actual temperature, leading to increased gas usage as people try to stay warm.
• Pseudo seasonal normal effective temperature: This component serves as a benchmark for seasonal temperature patterns. It provides a reference point for what temperatures are typically expected during different seasons. When the actual temperature deviates significantly from the pseudo seasonal normal effective temperature, it can indicate unusual weather conditions that might influence gas consumption. For example, a warm spell in the middle of winter may reduce gas demand compared to what would be expected based on the seasonal norm.
• Wind chill: Wind chill takes into account the cooling effect of the wind on gas usage. When the wind is strong, it can make the air feel colder than the actual temperature, prompting people to use more gas for heating. Wind chill can be particularly important in regions where windy conditions are common, as it can significantly impact gas demand.
• Cold weather upturn: This factor highlights periods of increased gas consumption during colder weather. It's a critical component of the CWV because it accounts for the fact that people tend to use more gas for heating when the temperature drops significantly. Understanding when these upturns occur helps energy providers prepare for increased demand during cold spells.
• Summer cut-off: This element signifies the reduction in gas usage during warmer months. As temperatures rise, people typically use less gas for heating, and this reduction is captured by the summer cut-off component. It's essential to identify when this decrease in demand starts, as it allows energy companies to adjust their supply and resources accordingly, ensuring efficient operations during low-demand seasons.

By incorporating these detailed weather-related components into the CWV, analysts can gain a more nuanced understanding of how weather conditions impact gas consumption. This knowledge helps in creating more accurate gas demand forecasts, which, in turn, assists energy providers in making informed decisions about supply, pricing, and infrastructure management.

Smooth Collaboration, Zero System Downtime and Accurate CWV Forecasts

Before partnering with Meteomatics, BGS conducted time-consuming CWV calculations and analysis in-house. Upon initiating collaboration with Meteomatics, they ran a testing phase, during which they received daily CWV forecasts and analyses for several months.

Tom Parker, Demand Forecasting Manager at BGS, highlighted the seamless collaboration with Meteomatics, stating, "During the testing phase, Meteomatics worked closely with us to assess and fine-tune the CWV system to meet our requirements. The collaboration was incredibly smooth, with zero system downtime and accurate CWV forecasts. So, we decided to integrate Meteomatics into our core system."

Greater Confidence and Improved Results

Meteomatics computes CWV values daily, providing forecasts for each of the 13 local distribution zones in the U.K., together with a UK aggregate, covering a 24-hour period. BGS receives a daily email containing a 14-day CWV forecast as well as an observed CWV value for the preceding gas day. With highly accurate CWV data, demand forecasters gain greater confidence in predicting customer gas consumption, which empowers the trading team to make more informed decisions.

Parker further noted, “Alongside the CWV service, the Meteomatics API is exceptionally accurate and user-friendly. It can be used not only by technical experts but also by data analysts with basic Python programming skills. It simplifies the process of incorporating new data streams into our models, fostering innovation within the company. The results have been significantly improved since we started working with Meteomatics, empowering us to enhance our offerings and stay at the forefront of innovation in our industry."

Meteomatics as an Innovation Enabler for Brook Green Supply

The collaboration with Meteomatics has proven to be extremely beneficial for BGS. Our data not only streamlines their forecasting process but also empowers data analysts and technical experts alike to harness this valuable information.

With highly accurate CWV data in hand, together with access to the API, demand forecasters at BGS gain the confidence needed to predict customer gas consumption with precision, enabling the trading desk to manage risk, reduce imbalance and generate profit.

As BGS continues to evolve, our partnership remains crucial. We offer comprehensive energy weather parameters beyond CWV, opening up possibilities for further improving forecast accuracy. Meteomatics supports BGS in innovating and meeting customer needs, while aligning with global efforts to reduce carbon emissions and promote environmental responsibility.