Ever since the Babylonians began to predict weather from cloud patterns and astrology, humans have tried to build a solid method to predict short-term, and increasingly of late, longer-term weather patterns.

The science of weather forecasting dates back to the careers of Francis Beaufort, an Irish hydrographer who served as Britain’s Hydrographer of the Navy in the mid-19th century, and his contemporary Robert FitzRoy, chief of weather data at the country’s Board of Trade.

Their scientific rigor and interest in all the earth sciences led them to be called the fathers of modern meteorology, though by the early 20th century advances in atmospheric physics enabled greater accuracy. By 1955 computers were able to produce practical forecasts.

Historically, there has always been a relevant role in weather forecasting in our energy industry. Temperature changes signal increases or drops in heating or cooling demand, as businesses and consumers turn to air conditioners or space heaters.

Similarly, rainfall forecasts are critical in managing hydropower generation assets: by building up databases of historical rainfall patterns and combining them with current weather forecasts, asset managers are able to determine how to optimize their generation.

The first fossil-fuel-fired power plant (Thomas Edison’s plant in London) and the first hydro dam (Fox River, Wisconsin) both began operating in the same year of 1882. Obviously, these pioneers did not enjoy the benefit of accurate weather forecasts and so “brown-outs” were a common phenomenon when demand overwhelmed the available supply.

The advent of scientific weather forecasting made it possible to manage supply to meet fluctuations in demand when weather conditions change. But it’s really in the last 30 years that technological advances have made possible new areas of weather forecasting. With the rise of solar and wind generation has emerged a demand for predictions of how much sunshine and how much wind are to come over different periods into the future.

Typical weather data now available includes forecasts for minimum and maximum temperatures, wind speed and direction, rainfall and “net radiation” (sunlight), all of which carry great relevance for the energy sector.

As an example, the European Centre for Medium-Range Weather Forecasts (ECMWF) and the Swedish Meteorological and Hydrological Institute (SMHI) provide forecasts for wind and solar power generation by the country for the next 12, 24 and 36 hours, and compares its forecasts with observed generation.

Weather forecasts act as a sort of risk management tool for renewable asset managers by helping to reduce uncertainty over the availability of primary energy sources (wind, sun, and rain). By careful analysis of forecasts, plant operators can decide how much energy they might have available to sell over a set period, enabling them to make the best use of assets.

It’s even possible to take risk management one step further now and buy or sell weather derivatives as a hedge against the loss of generation. A typical weather derivative is based on a specific index that can measure any aspect of the weather, be it rainfall, wind or hours of sunshine.

The upsurge in demand for accurate weather data – both forecasts and historical data – has led to a proliferation in the supply of market-relevant, actionable information from a huge variety of sources. Whereas in years past market participants may have relied on established, often state-owned providers, the last 20 years have seen numerous organizations enter the field.

This offers utility operators a vast choice of data to choose from, to compare and even to integrate into their operations. Combined with other risk management tools, it means that the new range of (interruptible) renewable power generation assets can now integrate seamlessly with legacy plants to offer the security of supply on a scale nobody could have expected 30 years ago.

Oil refiners may soon find themselves the target of an effort to cut greenhouse gas emissions in the northeast US using a cap-and-trade program.

A number of northeast US states are revving up to create a cap-and-trade program to cut CO2 emissions from cars and trucks.

This effort could end up creating the largest carbon market in the US and serve as a landmark regional effort to address climate change.

Work on the program is still in its early stages, but it could end up making the states’ refiners and fuel suppliers responsible for the CO2 emissions from gasoline and diesel used by drivers in the region.

Nine northeast states and the District of Columbia say they plan to use cap and trade to address CO2 emissions from transportation: the largest source of emissions in the region. They are working through a broader 12-state coalition known as the Transportation and Climate Initiative.

Under the hood, a cap-and-trade program is fairly straightforward. The states collectively set a limit (cap) on the total amount of CO2 emissions they will allow each year, which gets stricter over time, and they distribute allowances that represent those emissions. To provide some flexibility, the states allow companies covered by the cap to trade the allowances among one another. This allows supply and demand to set the price of CO2 and ensures that companies that cut emissions quickly can benefit financially by selling their extra allowances to those that need them.

For many of the states, this is not their first time working with cap-and-trade. Many are already members of the Regional Greenhouse Gas Initiative (RGGI), a decade-old program that limits CO2 from the electricity sector. California has its own cap-and-trade program, which covers transportation and electricity, and could provide a model for the northeast market. And much of Europe is covered by the largest cap-and-trade program for greenhouse gases in the world.

The emerging transportation program would dwarf the size of the RGGI program and could rival the scale of California’s economy-wide market.

Once the states put out their proposal later this year, each will need to decide individually whether to adopt the final plan and get the market underway. They also want to make sure the program that can accommodate new members in the future, as a larger market would reduce overall costs and lead to greater CO2 reductions.

The transportation program is in the slow lane at the moment and it will likely be about three years until trading could actually begin. But once it shifts into high gear, the states will have more than half of their total emissions covered by a cap-and-trade market and could be racing toward a lower-carbon future.

Written by: Sam Brock, Reporter on Sep 12, 2019 at Argus

Original source and weblink is here: https://www.argusmedia.com/en/blog/2019/august/22/vehicles-to-be-the-major-vehicles-for-co-2reduction?utm_source=ZEPower&utm_medium=referral&utm_content=blog&utm_term=emi&utm_campaign=AMER-EMD-2019-09-EMI-Air%20Daily%20Content%20Series%202019

The landmark cap-and-trade program has helped put the Golden State on track to meet its near-term greenhouse gas emissions goal – without wrecking the economy. Will others follow?

California and market partner Quebec easily sold off all of the carbon allowances offered at their latest auction, continuing a run of success that state leaders in Sacramento hope will encourage others to join the party.

One thing that might make such a move attractive to others: The 20 August sale of California Carbon Allowances (CCAs) raised over $725mn for the state’s Greenhouse Gas Reduction Fund. That fund directs money to projects that cut GHGs, like building houses near transit hubs or switching from diesel to electric buses.

Lawmakers love those kinds of projects, especially when they come to their home districts. And in California they have voted accordingly. The state Legislature decided two years ago to extend cap and trade to 2030, a move that preserved a major revenue stream while giving businesses wanting to invest in new technologies greater clarity.

Another plus for some market supporters: The price of CCAs in the secondary market has largely reflected this stability, trading a dollar or two above the program’s price floor of $15.62/metric tonne this year.

That means lower compliance costs for regulated business, which in turn means lawmakers can be less worried about higher prices at the gasoline pump and on the utility bill.

Some environmental groups and researchers have raised concerns that the market is oversupplied and have asked regulators to consider cutting back the number of allowances, a move undertaken at one point by the EU emissions trading system and the Regional Greenhouse Gas Initiative in the northeast US.

But the California Air Resources Board, which oversees cap and trade, appears loath to tinker with the allowance supply and punish companies that banked CCAs early in the program, particularly when the state is on track to meet its 2020 emissions target.

The agency also recognizes that any success in reducing GHGs will mean little at a global scale if other US states do not follow California’s example. A low carbon price might work just fine for now, to avoid scaring off potential partners.

To date, only Oregon has come close to adopting its own cap-and-trade program. A bill came up one Democratic vote short of passage in the state Senate this year (a walkout by Senate Republicans did not help, either). Lawmakers say they will try again in 2020.

Meanwhile, California will forge ahead with its carbon market. Demand for allowances at the auctions will likely remain high through at least 2020 as regulated entities prepare for more stringent emissions caps in the next phase of the program. The question now is if others will follow.

Written by Will Murtha, Senior Reporter on Sep 5, 2019, at Argus

Original source and web link is here: https://www.argusmedia.com/en/blog/2019/august/30/eureka-california-strikes-gold-with-carbon-market?utm_source=ZEPower&utm_medium=referral&utm_content=blog&utm_term=emi&utm_campaign=AMER-EMD-2019-09-EMI-Air%20Daily%20Content%20Series%202019