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The power sector’s meteorological information needs are diverse and cover many different distinct applications and users. Recognising this diversity, it is important to understand the general nature of how weather and climate influence the energy sector and the implications they have for quantitative impact modelling. Using conceptual examples and illustrations from recent research, this chapter argues that the traditional ‘transfer function’ approach that is common to many industrial applications of weather and climate science—whereby weather can be directly mapped to an energy impact—is inadequate for many important power system applications (such as price forecasting and system operations and planning). The chapter concludes by arguing that a deeper understanding of how meteorological impacts in the energy sector are modelled is required.

Quality of service and fiscal success in the energy industry often depend on how well meteorological information and forecasts are used to manage risk and opportunity. On the subseasonal to seasonal (S2S) timescales, a disciplined strategy allows decision makers to counteract predicted adverse climate variations in the coming weeks or months with action or financial hedges. Calibrated S2S probabilistic forecasts from some providers have sufficient skill that they engender confidence in the statistical consequences of acting. On the scale of several or more decades ahead, probabilistic outlooks can guide strategic planning and capital expenditures in directions that will ensure long-term resilience to climate change. In both cases, the probabilities are generated by statistical analysis of ensembles of supercomputer forecasts or climate change scenarios.

Work at the nexus between energy and meteorology aims at integrating meteorological information into operational risk management and strategic planning for the energy sector, at all timescales, from long-term climate change and climate variability to shorter term local weather. Weather and climate risk management can be a powerful instrument for development—not only for building energy system resilience and thus mitigating the effects of adverse events but also for ensuring that opportunities for enhanced system efficiency are exploited. The collaboration between energy and meteorology has a long history but has recently been strengthening, particularly in response to the new challenges posed by climate change and the necessary development of low-carbon energy systems. An efficient integration of high-quality weather and climate information into energy sector policy formulation, strategic planning, risk management and operational activities now, more than ever, requires improved understanding and communication between energy and meteorology specialists and decision makers.