The energy weatherman predicts the weather and the yield of solar panels | NOW

The war in Ukraine has turned the energy market upside down, but the growth of solar and wind energy is also making prices less stable. Major energy companies even have meteorologists in-house to help predict price fluctuations: “It could be quite a bit of money.”

On sunny summer afternoons, it may just happen this year that electricity prices are negative: anyone who buys electricity on the wholesale market during those hours will receive money. More power is then generated by solar panels than we actually need. While prices are at record highs at other times due to the sharp rise in gas prices.

It shows how renewable energy generation makes our electricity prices more unpredictable. If there is a lot of sun in the summer or if there is a lot of wind in the winter, prices can suddenly drop. But when there is little sun and wind, when our electricity has to come mainly from natural gas and coal, the price actually shoots up.

That is why weather forecasts are also of great importance for energy companies. On the trading floor in Rotterdam, traders do nothing but buy and sell electricity and gas all day long. Behind rows of computer screens, they monitor everything that can influence prices: whether it concerns the prices of fossil fuels, the expected consumption or the weather.


Market reacts to weather forecast

As an energy meteorologist at Eneco, Jan Bouke Pronk has to predict what the weather will do and what the expected yield of European solar panels and wind turbines will therefore be. The traders use that information to buy energy at a competitive price.

“If you can foresee better than the rest that there is a big chance of a lot of wind and that the price can therefore be lower than the market itself thinks, then you can trade with that,” explains Pronk. “That’s the game you play.”

When the wholesale electricity market opens at 8 a.m., Pronk has already looked at the latest updates to the weather models. If there are major changes, for example a storm that takes a different path than previously thought, he immediately informs the traders. “The market can react very strongly to that.”

Weather information not only plays a role in the yield of solar panels and wind turbines. This week, for example, the French nuclear power plants could spin less by the heat. If the rivers are already too warm, less heated cooling water may be discharged. The power stations cannot then run at full power.

This also has an effect across borders, because Western European countries exchange a lot of electricity with each other. For example, Dutch prices also show whether it is mainly wind turbines or coal-fired power stations that operate in Germany.

Millions fly over trading floor

A lot can depend on the correct weather forecast. In Rotterdam, the traders buy energy for the millions of Eneco customers, so huge amounts fly over the trading floor every day. “It can be quite a lot of money, yes,” says Pronk coolly.

As a result, he does not feel pressure: “The point is that I am more often right than wrong. And you have to communicate well about your insecurity. You should not say that a big storm is coming in two weeks anyway, that is not useful. “

“If a deal turns out badly, nobody is happy about it,” says Pronk. Sometimes that gets some “emotional feedback” from a trader. “You have to be able to deal with that. But in general, communication is very neat.”

According to Pronk, it is nice that his predictions could have financial consequences. “I’m glad that I’m not just working on meteorology, but that I’m also deeply involved in the whole energy complex. It’s much more fun than just watching what the weather does tomorrow.”

The demand for energy meteorologists has increased sharply in recent years. Since the generation of solar and wind energy continues to increase, there is still a long way to go. Pronk: “The dominance of the weather in the market will certainly not diminish.”

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