Temperature Adjustment of UK Energy Statistics Iain Mac

Temperature Adjustment of UK Energy Statistics Iain Mac. Leay

Temperature adjustment of UK Energy Statistics Iain Mac. Leay – May 2011 Between 2009 and 2010 what happened to UK energy consumption ? Did it a. Rise by 3. 9% b. Rise by 2. 9% c. Remain broadly unchanged d. Fall by 0. 6%

Temperature adjustment of UK Energy Statistics Iain Mac. Leay – May 2011 Annual average temperature (degrees Celsius)

Temperature adjustment of UK Energy Statistics Iain Mac. Leay – May 2011 •

Temperature adjustment of UK Energy Statistics Iain Mac. Leay – May 2011 Primary Energy Consumption Million tonnes of oil equivalent Unadjusted Seasonally and temperature adjusted (annual rates) 2009 211. 1 212. 6 2010 217. 3 211. 3 Per cent change +2. 9 -0. 6

Temperature adjustment of UK Energy Statistics Iain Mac. Leay – May 2011 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.

Temperature adjustment of UK Energy Statistics Iain Mac. Leay – May 2011 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

Temperature adjustment of UK Energy Statistics Iain Mac. Leay – May 2011 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)

Temperature adjustment of UK Energy Statistics Iain Mac. Leay – May 2011 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

Temperature adjustment of UK Energy Statistics Iain Mac. Leay – May 2011 Temperature adjustment Alternative methods 1. Use same factors for each month – or specific factors for each month 2. 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)

Temperature adjustment of UK Energy Statistics Iain Mac. Leay – May 2011 Coal data 10 000 9 000 8 000 7 000 6 000 5 000 4 000 3 000 2 000 1 000 0 янв-95 янв-96 янв-97 янв-98 янв-99 янв-00 янв-01 янв-02 янв-03 янв-04 янв-05 янв-06 янв-07 янв-08 янв-09 янв-10

Temperature adjustment of UK Energy Statistics Iain Mac. Leay – May 2011 Coal data 10 000 9 000 8 000 7 000 6 000 5 000 4 000 Raw temp sa 3 000 2 000 1 000 0 янв-95 янв-96 янв-97 янв-98 янв-99 янв-00 янв-01 янв-02 янв-03 янв-04 янв-05 янв-06 янв-07 янв-08 янв-09 янв-10

Temperature adjustment of UK Energy Statistics Iain Mac. Leay – May 2011 Coal data 8 000 7 000 6 000 5 000 Series 1 4 000 Series 2 Series 3 3 000 2 000 10 яно -1 0 се н 10 ию л- 10 й- ма р10 ма в 10 ян 09 яно -0 9 се н 09 л- 09 ию й- ма р09 ма в 09 ян 08 яно -0 8 се н 08 ию л- 08 й- 8 ма р0 ма ян в 08 0

Temperature adjustment of UK Energy Statistics Iain Mac. Leay – May 2011 Average monthly temperature 25 20 15 10 5 0 -5 янв-02 янв-03 янв-04 янв-05 янв-06 янв-07 янв-08 янв-09 янв-10

Temperature adjustment of UK Energy Statistics Iain Mac. Leay – May 2011 Heating degree days 600 500 400 300 200 100 0 янв-02 янв-03 янв-04 янв-05 янв-06 янв-07 янв-08 янв-09 янв-10

Temperature adjustment of UK Energy Statistics Iain Mac. Leay – May 2011 Temperature adjustment factors 20 Coal 15 12 Gas 10 10 8 5 6 0 4 -5 2 -10 -15 0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Temperature adjustment of UK Energy Statistics Iain Mac. Leay – May 2011 Final factors – using degree day methodology 12% 10% 8% 6% Gas Coal 4% 2% 0% Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Temperature adjustment of UK Energy Statistics Iain Mac. Leay – May 2011

Temperature adjustment of UK Energy Statistics Iain Mac. Leay – May 2011 UK energy growth 2009 to 2010 Raw data Temperature corrected data Primary energy consumption +2. 9% -0. 6% Final energy consumption +3. 9% +0. 1% Domestic gas consumption +15. 0% -0. 4%