4Q 2018

Unlocking the Value of Weather Data through Strategic Management

Climate change-related extreme weather events are causing significant problems around the world. Despite the profound socioeconomic effects of weather, it typically remains undermonitored and undermanaged. While utilities have vastly improved their storm-readiness, the lack of a strategic approach to weather data management means they are missing opportunities to improve operations and develop new business models. Today, many technology and analytics vendors hope to improve utilities’ approach to weather data. 

Although weather data is increasingly important, it is underutilized in a utility business. Utilities have not just recently recognized the value in using weather data; they have been using it for years. However, only a handful of applications have used weather, and responsibility for weather insights is fragmented across the enterprise. For example, owners of a hydroelectric power station pay close attention to rainfall statistics to predict when and how much power to produce. The more accurate hydro owners are at predicting future rainfall, the more accurate their power trading strategies. Other generators are also keen to better understand how weather affects their trading positions. A sunny and windy weekend day can cause negative power prices across Western Europe. Visibility into when these days will occur mitigates risk for all generators by more accurately predicting short-term loads, which feed into day or week-ahead positions.

This Guidehouse Insights report examines the potential applications of weather data in the utility industry and provides recommendations on more strategic approaches when using it. The study explores the emerging discipline of weather management and how it can support operating and business model innovation. It also discusses select use cases for weather data in the utility industry that depict how such data can be used to provide valuable insights across the entire utility value chain.

Pages 9
Tables | Charts | Figures 1
  • What are the primary drivers for the use of weather data in the utility industry?
  • What is holding utilities back from investing further in the use of weather data?
  • What are the future trends in weather data use?
  • Why should utilities adopt a more strategic approach to weather data management?

  • Utilities
  • Regulators
  • Technology vendors
  • Systems integrators
  • IT consultants
  • Investor community




Weather Management Is an Emerging Discipline

Climate Has a Tangible Effect on the Energy Industry

Weather Is Not as Well-Managed as Climate

Weather Management Can Support Innovation

Few Manage Weather Well; Those Who Fail Miss Opportunities

Weather Provides Valuable Context for Utility Analytics

Use Cases for Weather Data in the Utility Industry


Transmission and Distribution

Customer Relationships

Take a Strategic View of Weather Data

Make Better Use of Existing Weather Data Assets

Step Forward the New Chief Weather Officer?

Incorporate Weather Data into New and Existing Services

Recognize Mutual Benefits between Utilities and Weather Data Vendors

  • How Weather Has Affected Organizations in the Past 12 Months
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