Seasonal Weather Variation and Its Impact on the Energy Industry

The annual cycle of seasons produces variation in temperature and commercial activity that directly impact the US energy markets. Energy producers, businesses and even individual home owners learn through experience to expect a certain range of variation in energy consumption throughout the year. The weather usually falls within the expected range of variation, so business is conducted as usual. But when the weather approaches margins of "normal" and especially when the weather goes outside of and stays outside of "normal" ranges for days or weeks, the integrated effects on the energy markets can be very significant.

AER has been producing seasonal forecasts commercially for more than a decade. Drawn from our experience of producing operational forecasts, we will discuss the normal variation of seasonal weather and some of the Earth system components that are understood to drive seasonal weather and their impact on seasonal variations and weather extremes observed over the past decade. We will also show examples of seasons that are outside the range of expected weather, and discuss their potential impacts on the energy industry and on the US renewable energy portfolio in particular.