Winter Weather Expectations: Above Average Winter Electricity Demand?

Winter Weather Expectations: Above Average Winter Electricity Demand?
Blog November 26, 2018

Ahead of every season, Genscape’s power market analysts and meteorologists provide in-depth insight and forecasts for all seven of the U.S. power markets. We give our expectations for anticipated events and uncover the historical drivers behind market movements. One of the main drivers that we closely examine is weather.

Weather greatly impacts power pricing across each grid during the winter. Between temperature, cloud cover, wind, and snow storms, weather can be considered one of the most important and most difficult fundamental drivers to analyze. Our meteorologists are experts in this analysis and are constantly watching weather events in real-time to offer a new level of transparency into wholesale power markets for our clients.

During our Winter 2018-19 Power Market Outlooks taking place from November 26 to 29, we will be going into depth on our weather expectations. Overall our meteorologists are calling for favorable conditions for electric demand across the eastern half of the U.S. From December to the end of January, we expect for a west-to-east contrast in temperature anomalies, including colder-than-average conditions for the regions east of the Rockies.

In comparison to the National Oceanic and Atmospheric (NOAA) Winter 2018-19 Forecast, our forecast calls for colder temperatures in the eastern power markets including the Electric Reliability Council of Texas (ERCOT), Midcontinent Independent System Operator (MISO), PJM, and the New York and New England Independent System Operators (NYISO, ISO-NE). This decrease in temperature across the East will bolster heating load, resulting in stronger electricity demand compared to an average year for these markets. We expect December to be closer to average in terms of temperatures and electricity demand while we anticipate colder-than-average conditions in January and February.

National Temperature Outlook
Figure 1: Genscape's Winter 2018-19 U.S. temperature outlook. Click to enlarge
U.S. Temperature Outlook
Figure 2: National Oceanic and Atmospheric Administration (NOAA) Winter 2018-19 U.S. temperature outlook. Click to enlarge

Be sure to request a trial of our PowerIQ Market Intelligence Service to join our seasonal U.S. Power Market Outlooks. Our meteorologists will provide a deep dive into these weather expectations for each region alongside our power market analysts who will provide power price forecasts, uncover risks and scenarios, analyze congestion, and more. Click here to learn more.