An Industry Perspective on the Global Observing System

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An Industry Perspective on the Global Observing
System 

• Dr. Mary Altalo
• Science Applications International
  Corporation8301 Greensboro DriveMcLean,
  Virginia 22102Phone [phone]Mary.G.Altalo_at_s
  aic.com

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Outline

• Vision of An Information System
• Mission Statement for Sustainability- Societies
  and Economies
• Provider and User Concept
• Market Segments for Information
• Market Sector Decisions Requiring Information
• Economic Valuations of Information
• Implication for Observing System Design
• New Industry Drivers
• Further Issues

Altalo
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Environmental Information and Sustainability
Mission
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Provider and User ConceptDual Responsibilities
Providers Push
Users Pull
Data Information
Actionable Knowledge
Added Value
Partnership
-Interpret user Needs -Sensitize Market
research
Research
Government
GOOS IOOS OOI
National Met-Ocean Services
Business
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Target Market Segments or UsersDefine the
Optimal System Configuration
Research Community
Governments
Business

• Energy
• Water
• Tourism Leisure
• Health
• Construction
• Transport
• Financial Services
• Defense

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EXAMPLES OF PRODUCTS OF INTEREST TO INDUSTRY

• Sea Level
• Current speed, rip tides, undertows
• Real time and Average daily temperature,
  humidity, rainfall
• Average Annual temperature, humidity,rainfall
• Heating and cooling degree-days (Last 30 years)
• Wind speeds and direction
• Cloud Cover
• Wave height
• Ocean current speed and direction
• Red Tides

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• Building Energy Management

• Oil and Gas Operations Planning

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Other sectors---other uses
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How do Industries use the Information?Case
Studies

• Recreation and Tourism
• Construction Industry
• Energy

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Leisure Industry Needs
.
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Recreation/Tourism Business Decision Models
Requiring Environmental Information

• Revenue per available room (RevPar)
  Accommodation sector
• Occupancy rates Accommodation sector
• Occupancy percentage Accommodation sector
• Average Daily Rates (ADR) Accommodation sector
• Comparative Operating Rates (COR) Accommodation
  sector
• Gross Operating Profit ( before fees) Across the
  industry
• Economic Impact Assessment Across the industry
• Financial rate of Return (FRR)
• Economic Rate of Return (ERR)
• International arrivals Travel sector
• Journeys made Travel sector
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• Input Both Statistical and Probabilistic
• Hindcast and Forecast Environmental Information

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Business/Policy Trials Observing System Product
Performance Assessment in Business Operations

• Utilities-Energy Pricing 4hr forecasts of
  temp./ sea breeze - Scottish Power
• Oil and Gas- Regional Energy infrastructure
  master planning and climate/ocean conditions - BP
• Construction- Building codes standards with 20
  year heat/ precipitation/sea level forecasts-
  Building Research Establishment
• Leisure - Revenue projections and seasonal
  temperature/ppt forecasts The Starwood Group,
  Europe/Africa
• Finance Financial Risk Rating Index and
  air/water quality and climate forecasts- SERM
  Rating Agency
• Health and EM- Coastal metropolitan health alert
  planning and met/AQ forecasting-National
  Environmental Research Institute (DMEE)

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Starwood Hotel Industry TrialMarbella, Spain

• Can seasonal environmental information improve
  the accuracy of Revenue Forecasting in the
  Ibearian Penninsula?

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Resort Construction Decisions Requiring
Environmental Information

• Seismic/soil
• Air/water Quality
• Sea Level/beach
• SST
• Red tides
• Ppt/temp

• Storm surge
• Winds
• Sea breeze
• Precipitation

• T,humidity,cloud cover, ppt
• Air quality
• Emissions/air and water

• Climate, ppt, temp, winds
• Fire risk

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Defining the Range of Uncertainty

• NOAA 1998-2000-Defining the weather/climate
  requirements for the energy industrybreadth
  of use across all sectors and lead time

Critical forecast periods for improvement Sub
day, 2-4 day, 90 day
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Observing System Information in the Value Chain
of CONOCO Business Units Functions

• Business strategy
• Demand forecasting
• - Economic growth
• - Energy switching
• - Weather/ climate
• Supply forecasting
• Hedging and futures
• Transportation and inventory

• Strategic planning
• Risk assessment
• -Political
• -Safety/environ.
• -Social impact
• -Economic
• Host government negotiation

• Field development plan
• Risk assessment next level
• Sustainable development plan next level
• Production wells
• -Land based pads
• -Offshore platforms
• -Supply systems
• Field processing
• Transportation system

• Oil refineries
• Floating processing tankers
• Fixed platform processing
• Deepwater tension leg platforms
• Natural gas processing
• Carbon fibers
• Natural gas refining
• Safety, environment, and social issues

• Listen-Understand
• Balance Quality, Flexibility,Cost
• Safety Environment
• NIMBY
• Competition

• Seismic evaluation
• Land prospect
• Underwater prospect
• Risk assessments
• Sustainable development plan
• Exploration and drilling
• Economic assessment
• Strategic alliances

• Liquid product pipelines
• Gas pipelines
• LPC pipelines
• Product terminals
• Trucking
• Inland waterway barges
• Product tankers
• environment and social issues

• Crude oil gathering systems
• Terminals and trucks
• Overland crude oil pipelines
• Offshore underwater pipelines
• FPSO shuttle tankers
• Inland waterway barges
• Tankers design

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Alternative Energy Supply Issues

• Renewables Portfolio Targets for National Needs
• Governors targets- e.g. CA, 20 Renewables by
  2017- currently at 12
• Federal Needs-Energy Security, energy efficiency,
  emissions reductions (health)
• Renewables (wind/hydro) Siting, Construction
  Operation
• Offshore wind fields, wave height, subsurface
  currents, storm prediction, sea level,
  sedimentation, precipitation, evaporation, floods
• Renewable Energy Delivery and Storage
• Demand variability due to extremes, storms, fog
• portfolio management with offshore wind prediction

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• Economic Valuation of Information

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How to Calculate the National Return on
Investment?

• Economic Cost-Benefit Analysis- holistic approach
  based on assumptions
• Business/Policy Trials or Performance Assessment
• User-Supplier Partnership with short term Goals
• Environmental Forecast Transforms into
  Business/Policy Forecast
• Improved Skill of Environmental Forecast
  increases Skill of the Business/Policy Forecast,
  thus Demand Pull
• Requires Information from Ocean, Weather and
  Climate Observing Systems
• Guides Marketplace Decisions and Strategy
• Informs National Policy and Strategy
• Prioritizes National S T Strategy for Observing
  system design, implementation and operational
  decisions

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Method Template or Roadmap

• Generic concept portable to all nations,
  industries, observing systems and products
• Starts with the Function of Decision Making
• ID Organisational Units making the decision into
  which environmental information fits
• ID the business forecast models, formats, portals
• Tailors environmental forecasts to need
• Assimilate information
• Generate scenarios
• Analyse options
• Evaluate consequences (fiscal and risk)

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The Northeast Energy Network Performance Analysis
 

University of New Hampshire
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Overall Goal

• Examine the value of improvement in
  weather/climate forecast accuracy to major
  stakeholders in the Electric Power Value Chain
  (Sellers, Distributors, Buyers)
• Determine the precise requirements of the
  stakeholders for the improvements of
  decisions-what do you do?
• Establish the Impact of forecast accuracy on the
  operation and planning decisions of the Industry
• Examine and Improve the Decision Support Tools of
  the User community to institutionalize
  information
• Develop the Stakeholder Advocacy through
  experience

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The Setting for the Stakeholder Assessment 1

• New England Grid Operator weather impacts on
  short term load forecasting
• Major Urban Utility weather impacts on
  distribution system loads
• Major state owned end user use of weather
  forecasting to control day ahead electric prices
  and manage natural gas and electricity costs at
  state facilities

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The Industry Trials Approach

• Identify stakeholder industries
• Vulnerability assessment
• Benchmark Use of environmental Information
• Perform an error analysis
• Generate scenarios
• Options analysis
• Beta Test Environmental Information
• Determine Costs and optimize

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Key Utility functions/decisions requiring coastal
weather/climate/ocean data

• Load Balancing-single utility and grid
• Generation commitment- fuel mix choice (fossil
  fuel, hydro, wind)
• Dispatch scheduling
• Power Marketing
• Cash trading
• Power pricing
• Fuel pricing and procurement
• Tariff Scheduling
• Pump Load (Irrigation) Forecasting for Hydro
• Natural Gas Storage Management
• Revenue Projections
• Infrastructure siting
• Management strategic planning

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Urban Utility Case Study Findings 1 Significant
load error due to weather

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• Most utilities calculate weather error in
  MW as well as percentage of variance of the load.
  Analysis indicates that on some days, variance in
  the load forecast in MW may be solely due to
  weather error. This appears to be from events or
  unmodeled mesoscale features such as back door
  fronts, sea breeze and afternoon thunderstorms.
  The cost of such events can be up to 10M/day

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NESTING THE COASTAL INTO THE GLOBAL KEY TO
DESIGNING FOR APPLICATIONS
Wind Resource Map Produced by SiteWind
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Key Cost Findings2002-2003 NOAA Northeast Energy

• The project estimated that the benefits of
  improving day ahead weather forecast accuracy by
  one degree F or by reducing forecasting error by
  50 for days 2-7 is
• --20-25 million per year for a regional
  transmission authority
• --1-2 million/year for a major distribution
  utility.
• Optimal use of weather information could yield
  savings of 818 million/year for a major
  university system (electric and natural gas).
• If these savings were generalized to other
  regional transmission organizations, large
  statewide colleges and universities and regional
  transmission authorities the total savings would
  be for the Northeast Region
• -- 100-140 million/year for ISOs
• --30-60 million for regional electric
  distribution companies.
• -- 38-67 million for Statewide university
  campuses
• Furthermore, capturing the events on top of
  this will yield significantly higher savings
  (millions/day).- seabreeze, backdoor fronts,
  afternoon showers

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Case Studies 2 and 3
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Relationship of Weather Uncertainty and Cost
Grid Operating Companies
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ISO Mean Daily Forecast Error

• Delta Breeze and weather/load forecast errors
  contribute to major errors
• in prediction of Delta Breeze effects
• Delta Breeze is defined as the conditions when
  the wind speed is gt 12 knots,
• and the direction being between 190 degrees and
  280 degrees.
• Multiple causes and dynamics that cause Delta
  Breeze.
• A major priority of the ISO is to reduce this
  error

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The Inextricable Relationship of Weather
Uncertainty and Cost Grid Operating Companies

• Cost
• Driven by spot market and last marginal unit
  required
• Replacement power costs are often highest during
  periods of high peak demand and congestion
• Replacement power costs can be anywhere from from
  200/MWh to over 1000.
• Price caps exist in California and western states
  which artificially suppress real market clearing
  prices
• Potential market value costs might range anywhere
  from 200-1000/MWh
• Cutting forecast error by 70 can save as much as
  560,000-2,800,000 per hour during critical peak
  periods!

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Principle Causes of Uncertainty on Energy
Operations and Planning

• Uncaptured WIND Events
• Delta Breeze- Cal ISO
• Lake effects- Salt Lake City- Pacificorp, Great
  Lakes- SUNY Buffalo
• Seabreeze- NE ISO
• Frontal passage- 2-4 day
• Uncaptured PRECIPITATION Events
• Rain vs. snow/ice
• Regional day ahead error in precipitation-
  Pacificorp
• Afternoon thunderstorms
• Marine Layer, fog- SDGE
• Drought and flood, flash flood
• Uncaptured CLIMATE Events
• Climate outlooks weather events frequency
• El Nino and seasonal events
• Decadal ocsillations- NAO
• RESOLUTION- Spatial, temporal
• Sub grid level
• Targeted watershed level, Nodal, congestion and
  population
• Topographic Effects- microzones

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Requirements
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Business Process Reengineering Needed for
Improved Decision Making

• Incorporate Climate Change parameters into
  planning
• Incorporate Probability Distribution forecasts
  into models
• Incorporate Ensemble Forecasting into methods
• Incorporate complex topographic features for
  microclimate estimates
• Include rainfall behavior on sub-grid level
  (soil moisture and evaporation)
• Incorporate seabreeze, lake effect, fog,
  afternoon thunderstorms and frontal passage into
  forecasts

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New Industry Sustainability Drivers

• Triple Bottom Line Metrics
• Environmental Protection
• Social Enhancement
• Company Profit
• Socially Responsible Investment

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Sustainability as a Driver for System
Requirements

• As more corporations are adopting efficiency
  measures and "sustainability strategies" in which
  "triple bottom line" company performance metrics
  of profit, environmental health and social
  benefit are valued equally, the requirements for
  new information from observing systems will
  escalate.

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ISSUES

• Design to social and economic requirements
• Formulate Long term investment strategy with all
  parties
• Define socially relevant metrics
• Prepare the business community to mainstream
• environmental Information in business decision
  aids
• Conduct pilots for engagement
• Focus on Outcomes and Impacts
• Prepare the ROI

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