GENSCAPE
- ESSENTIAL ENERGY INFORMATION
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Section: data resources
Daily Gas Burn Report (US)
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The most casual observer of gas markets will immediately notice that Thursdays are special days. The release of the EIA storage number injects an additional dose of volatility that drives the average price change on that day to a weekly peak. (Monday’s average absolute change is higher, but that reflects the pent-up volatility from the weekend) The publication of the storage number itself is, of course, not what
causes volatility. The discrepancy between market expectation and actual
published number amplifies price swings. Consumption for Power Generation Drives Storage Swings Nearly all storage prediction models rely on temperature or heating and cooling degree days as well as information published on bulletin boards by the natural gas pipelines. The main factor driving consumption in the winter is the need for heating. In the summer, power consumption for cooling also has a substantial effect. The public pipeline data contributes non-weather related effects to fine-tune the prediction. But the pipeline data is opaque – the reason behind the swings is not clear. Also, the data that is posted represents nominations not actual flows. Therefore, unplanned maintenance at a storage facility can have a big – and negative – effect on the storage prediction. To get a better picture of non-weather related factors, more sophisticated models rely on estimates of power consumption. Even in the winter power consumption plays a large role in gas consumption and thus determines the amount of the drawdown from stocks or the available quantity for injection. The trouble with these estimates is that they could never account for the availability of power from plants powered by fuels other than gas. Genscape Data Drives Power Generation Estimates The power generation estimates were by necessity therefore inaccurate. Genscape uses direct measurements of coal, nuclear and hydro generation, as well as gas-fired generation to produce its Weekly Gas Burn Estimate. Genscape is the only source for directly measured power output data published in real time. Using this data, Genscape can create highly accurate gas burn estimates. Genscape Gas Burn Estimate Drives Accurate Storage Prediction Accurate gas burn estimates lead to higher accuracy in predicting the storage numbers published weekly by the EIA. Using a standard model with temperature and public pipeline data, Genscape showed an absolute average error of 7 BCF. Introducing the gas burn estimate into the prediction calculation improved the prediction by 1 BCF. More sophisticated gas storage prediction models are likely to achieve similar of even better improvements in accuracy.
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