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Temperature Adjustment of UK Energy Statistics

Temperature Adjustment of UK Energy Statistics. Iain MacLeay. Between 2009 and 2010 what happened to UK energy consumption ? Did it Rise by 3.9% Rise by 2.9% Remain broadly unchanged Fall by 0.6%. Annual average temperature (degrees Celsius). Statistical Model.

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Temperature Adjustment of UK Energy Statistics

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  1. Temperature Adjustment of UK Energy Statistics Iain MacLeay

  2. Between 2009 and 2010 what happened to UK energy consumption ? Did it • Rise by 3.9% • Rise by 2.9% • Remain broadly unchanged • Fall by 0.6%

  3. Annual average temperature (degrees Celsius)

  4. Statistical Model Y = C * I * S * TD * E * temp Where: Y = observed time series C = trend-cycle I = irregular component S = seasonal factor TD = trading day effect E = Easter effect temp = Temperature coefficient Note: Model can be arithmetic rather than multiplicative Y = C + I + S + TD + E + temp; or a combination of the two.

  5. Temperature correction Y / temp = C * I *S * TD * E Assume no temperature, Easter or trading day effects then: Y = C * I * S And the seasonally and temperature adjusted series is Y / S = C * I

  6. Two main statistical techniques used • Regression • Easter • Trading days • Temperature effects • Moving averages • Trend-cycle • Seasonal component + ARIMA modelling to help improve the calculation of the moving averages (extend time series by forecasting one year of additional data)

  7. How do we currently adjust for temperature • Gas • National Grid provide temperature adjusted series as well as the raw data for gas • Adjustments are smaller in the summer months of July and August. Largest adjustments in fact appear in Spring and Autumn • Does this seem sensible ? • Coal • Adjusted by factor of 2.1. • If temperature is 2 degrees above “normal” then factor = (2 * 2.1) = 4.2. Raw data is divided by 0.958 resulting in temperature adjustment increasing the series. • Warm weather – use less energy – so temperature adjusted series should be higher • Same adjustment used irrespective of season

  8. Temperature adjustment Alternative methods • Use same factors for each month – or specific factors for each month • Use monthly average temperatures (current practice) or degree days (only use heating if daily temperature above/below threshold) 3. Growth in cooling – should this be adjusted for? Data • DECC receive data from the Met Office (17 stations reporting daily max and min temperatures)

  9. Coal data

  10. Coal data

  11. Coal data

  12. Average monthly temperature

  13. Heating degree days

  14. Temperature adjustment factors

  15. Final factors – using degree day methodology

  16. UK energy growth 2009 to 2010

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