Integrating Information, Misinformation and Desire: Improved Weather-Risk Management for the Energy Sector
Weather-risk management has many facets. One particularly costly challenge comes from “chasing the forecast”. The Forecast Direction Error (FDE) approach was deployed to address the dilemma facing decision-makers who face this challenge: today’s probabilistic weather forecasts contain too much information to be ignored, but not enough information to be safely acted on as probability forecasts. Success was obtained by focusing on the information content of forecasts, and restricting their use to tasks in which the forecasts are informative in practice.
KeywordsWeather Forecast Capture Rate Forecast System Predictive Distribution Probability Forecast
The FDE’s success hinged on the engagement and enthusiasm of Dave Parker, chief meteorologist for EDF England. EPSRC and NERC grants supported the work of Jochen Bröcker, Liam Clarke, and Devin Kilminster. I am grateful for the support of Pembroke College, Oxford.