FROM WEATHER TO ENERGY

PRESENTED TO:

4TH C3S ECEM STAKEHOLDER WORKSHOP PRESENTED BY:

DR G. MASATO METEOROLOGIST / ANALYST BARI 30TH JUNE 2017

2

• Marex Spectron Ltd. (Research desk)

• Case Study #1

• Case Study #2

• What we are after…

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MAREX SPECTRON RESEARCH

1

Renewable share and +1D energy price [€/MWh] in Germany

10

15

20

25

30

35

40

45

50

0%

5%

10%

15%

20%

25%

30%

35%

40%

26293235384144475053 3 6 9 1215182124273033363942454851 1 4 7 10131619222528313437404346

2013 2014 2015

solar wind 1D ahead

4

CASE STUDY #1

5

CASE STUDY #1

Solar L

H

Wind Power

Generation

Solar Power

Generation

Wind

L High

L

H

Low

H

L

H

6

CASE STUDY #1

Production (renewables) and demand index

-80%

-40%

0%

40%

80%

1 2 3 10 11 12 1 2 3 10 11 12 1 2 3 10 11 12 1 2 3 10 11 12 1 2 3 10 11 12

2011 2012 2013 2014 2015

production index demand index

Solar

H

Low

H

L

High

H

L

Wind

H

L

PRODUCTION INDEX = (WIND + SOLAR) – LOW

DEMAND INDEX = LOW – (WIND + HIGH)

7

CASE STUDY #1

Production (renewables) and demand index

-80%

-40%

0%

40%

80%

1 2 3 10 11 12 1 2 3 10 11 12 1 2 3 10 11 12 1 2 3 10 11 12 1 2 3 10 11 12

2011 2012 2013 2014 2015

production index demand index

Solar

H

Low

H

L

High

H

L

Wind

H

L

PRODUCTION INDEX = (WIND + SOLAR) – LOW

DEMAND INDEX = LOW – (WIND + HIGH)

1

Renewable share and +1D energy price [€/MWh] in Germany

10

15

20

25

30

35

40

45

50

0%

5%

10%

15%

20%

25%

30%

35%

40%

26293235384144475053 3 6 9 1215182124273033363942454851 1 4 7 10131619222528313437404346

2013 2014 2015

solar wind 1D ahead

8

CASE STUDY #2

2

Gas vs. wind share for electricity production (GER)

R² = 0.5956

0%

5%

10%

15%

20%

25%

30%

35%

40%

0% 5% 10% 15% 20% 25%

Gas s

hare

Wind share (2014/15)

R² = 0.7407

0% 5% 10% 15% 20% 25%

Wind share (2015/16)

9

Predicted vs. observed demand index

0%

10%

20%

30%

40%

50%

60%

high dem low dem

High predicted demand

Low predicted demand

Weather regimes associated with gas demand

Low

H

L

Wind

L

H

• Weather regimes can be used

to forecast natural gas

demand (electricity

generation).

• A spread between gas vs.

wind share is derived, which

helps forecast the trends for

gas demand.

Observed and forecasted spread for gas & wind share (GER)

-50%

-40%

-30%

-20%

-10%

0%

10%

20%

30%

30-Oct 06-Nov 13-Nov 20-Nov 27-Nov 04-Dec 11-Dec

actual forecast verification

CASE STUDY #2

This research has been prepared by Marex Spectron for information purposes only. Marex Spectron does not give any representation or warranty, whether express or implied, as to the accuracy, completeness, currency or fitness for any purpose or use of any information in this research. Information in this research should not be considered as advice, or as a recommendation or solicitation to purchase or otherwise deal in securities, investments or any other products. It has been prepared for institutional clients, is not directed at retail customers and does not take into account particular investment objectives, risk appetites, financial situations or needs. Recipients of the research should make their own trading or investment decisions based upon their own financial objectives and financial resources. This research may contain forward looking statements including statements regarding our intent, belief or current expectations with respect to Marex Spectron’s businesses and operations, market conditions, results of operation and financial condition, capital adequacy, specific provisions and risk management practices. Readers are cautioned not to place undue reliance on these forward looking statements which may be subject to change without notice. While reasonable care has been used in the preparation of forecast information, actual results may vary in a materially positive or negative manner. Forecasts and hypothetical examples are subject to uncertainty and contingencies outside Marex Spectron’s control. Past performance is not a reliable indication of future performance. The Marex Spectron® group of companies including Marex Financial Limited, Marex Spectron International Limited, Marex North America LLC, Marex Hong Kong Limited, Marex Spectron Asia Pte Ltd and Spectron Energy (Asia) Pte Ltd (individually and collectively “Marex Spectron”). This research was approved by Marex Spectron International Limited (“MSIL”). MSIL is incorporated under the laws of England and Wales (company no. 03938219 and VAT registration no. GB 872 8106 13) and is regulated by the Financial Conduct Authority (registration no. 193027). MSIL’s registered address is at 155 Bishopsgate, London, EC2M 3TQ. RESEARCH (LONDON) +44 20 76 55 60 00, Georgi S. Slavov, Head of Research | Weather & Climate Research Dr. Giacomo Masato, Research Analyst | RESEARCH (SINGAPORE) Geological Research +65 (0) 64130046 Hui Heng Tan, Research Analyst