Improving Renewable Energy Decision Support with Subseasonal-to-Seasonal Forecasts

Weather derivatives such as the Enwex wind and solar indices enable renewable energy producers and consumers to hedge volumetric risks transparently and efficiently. Much like the CME's established Heating and Cooling Degree Day products, these emerging financial instruments can be traded in private or open exchanges. Salient Predictions' 52-week AI-based probabilistic weather forecast provides differentiated insights beyond traditional 14-day numeric weather forecasts. This study builds and backtests an automated decision engine based on Salient's forecasts, quantifying the link between forecast skill and business value for traders, consumers, and operators.