Article from "The Desk"
Friday, August 12, 2005 Volume 8

When the company first hit the scene a few years ago with its novel, real-time generation and transmission flow monitoring product – they actually have hardware on the ground outside many generation plants – we figured they were ready to deliver products that traders couldn’t live without.

If you know how much power is flowing at any given time, you can extrapolate everything from fuel use to emissions, and so on. From that first monitoring product, the company has indeed launched a slew of other real-time and/or weekly analytic packages, like the Coal Burn report. –That one provides data that estimates coal burn at the nation’s major utilities on a weekly basis and provides guidance on key market fundamentals, an emissions report that tracks SO2 and NOx emitted by the major utilities and duplicate products and services for the EU market. To close the loop on things, Genscape has just taken the wraps of the next big thing in market forecasting: the Genscape Daily Gas Burn Report. From what company chief Sean O’Leary told us this week, his beta customers just got a whole lot better at predicting the EIA storage report each week.

“In the last year or so, we’ve been developing a number of products based on our proprietary power monitoring data. We started with coal, then emissions and now gas. Our customers and focus groups tell us that, besides weather forecasts, the second- biggest variable in their storage models is some form of gas burn analysis,” O’Leary says. “For the most part, this analysis was done by way of any gas nominations data they could get their hands on. This flow data is pretty spotty if you’re relying on public sites. For our data, we have a better than 98 percent confidence level.”

The fact these guys have real-time generation monitors at more than 1,200 points across the US, resulting in output and flow estimates on more than 300 power plants and major interconnections,makes it a bit easier to figure out what kind of gas use is going on at any given facility, or for that matter, coal use, nukes and so on.

The product is a set of daily figures in CSV and PDF format that is delivered via e-mail. The report is broken down regionally the same way the EIA organizes its weekly storage report East, West and producing regions. It offers seven-day and weekly totals, rolling averages, gas burn versus regional temperature indices and more.

O’Leary said that last week one of his beta customers described the report as “bridging the gap between what the market expects the EIA report to be and what is actually happening out there.” Future versions of the report will offer a gas burn numbers broken out by, for instance, NERC regions. We reckon futures traders would love this stuff. Abudi Zein, the Genscape rocket scientist behind the new gas burn report, says that his figures will by and large be much more accurate than most people’s models, simply because his data is “based on reality, and less weight is given to prices or other economic factors.

“The fact is, economic models aren’t always the best way to determine what is running or what is not. Often generators will take a less economic strategy because of congestion, or because their neighbor didn’t get fuel this week and had to run X unit, which means you need to run Y unit. Our advantage lies in the fact that we start from something real, the actual electricity flow data. And then we build on that,” Zein says. The product is just now coming off the trial phase, with 20 or so companies involved in the beta tests. “We’re just beginning a soft launch right now, to formally sell the gas burn report, O’Leary says. The report will be sold on an annual subscription basis.

“For the past few weeks, the EEI figures have been indicating that gas burn has been down. Our figures have shown that gas burn is way up. Last week, most of the big analysts and surveys overestimated the EIA storage number. Our current users, on the other hand, plugged our burn data into their models, and got it right,” Zein says.