Download - The business case for weather solutions for the energy market

In this week's featured download, The Weather Company's white paper explores the operational and business benefits of advanced weather solutions for the energy market.
Published: Tue 10 Apr 2018

The Weather Company’s white paper makes a business case on how utilities can drive return on investment (ROI) from deploying advanced weather solutions.

Energy-trading companies are frequently pressured to make smarter, faster, more profitable trades. However, this can be difficult if a company does not have appropriate and comprehensive real-time or near-real-time weather data at granular levels.


In order to ensure suitable hedging and maximum profitability, companies would require insight into expected seasonal weather patterns and accurate demand planning. Pulling this information, generating reports and analysing the outcomes can be a daunting, time-consuming and potentially expensive process. The added time can result in lost revenue opportunities – especially when the goal is to be the first to make a market move.

There are several challenges for energy-trading companies where advanced weather solutions can be of significant help, including:

  • How to increase the speed and profitability of short-term trades
  • How to improve the success of longer-term positions
  • How to reduce the time required to generate reports and analyses
  • How to improve demand-forecasting accuracy for traditional power and renewables

The paper was realised in partnership with Hobson & Company, a research firm focused on ROI and total cost of ownership (TCO). Hobson & Company and The Weather Company explored the aforementioned challenges and highlighted examples of operational and business benefits that can be realised with advanced weather solutions for the energy market.

In-depth interviews and a survey comprising eight existing customers found that The Weather Company’s energy solutions addressed customer challenges and delivered measurable results and a compelling ROI. In the end, customers identified three benefits of advanced weather solutions for the energy market from The Weather Company: skill, speed and precision.

Improvements in skills resulted in direct benefits for trading. Customers experienced increase profitability with more effective short-term trades, as well as enhancing position management for longer-term trades.

Benefits that ensued from enhancing speed included reduced time for data interpretation for meteorologists and traders, reduced decision-making time while increasing trade speed, and reduced time to create data reports and analyses.

Finally, precision improvements were followed by improving longer-term positions with better demand data, reducing costs with better short-term demand accuracy, reduced need to buy on short notice because of poor alternative energy predictions.

The above outcomes were found to increase profitability and ROI for customers. For instance, it is estimated that a sample company could potentially experience up to $298,000 in benefits per year from improved precision alone. With better skill and speed, its annual benefits could be as high as $648,000. For this sample organization, the three-year investment of $320,000 generates a positive return in 3.9 months.