Seasonal to Decadal Climate Forecasts for Renewable Energy: Connecting to Users through the ARECS Initiative

Transcription

1 Seasonal to Decadal Climate Forecasts for Renewable Energy: Connecting to Users through the ARECS Initiative Melanie Davis Catalan Institute for Climate Science Europe l Energy Introduction Natural hazards, including the impact of climate variability, pose risks to the power sector that is not well understood by renewable energy (RE) stakeholders. Energy yields from solar and wind projects are directly linked to a large array of climate parameters (e.g., wind speed and direction, solar radiation, temperature, etc.). As a result, strategic decisions related to RE investments and the integration of wind and/ or solar energy into the energy grid system is intricately tied to the variability of climate. The Advancing Renewable Energy with (ARECS) initiative aims to provide useful and useable seasonal to decadal 1(s2d) wind and solar forecasts for the RE sector, to help RE stakeholders understand and manage climate-related risks and opportunities. 2 This includes the probability of individual or extended months, years and/ or decades of unexpectedly low or high energy yield due to climate variability. The overall objective is to develop an operational RE s2d climate service for the RE sector. ARECS will utilise both the climate and energy value chains. It begins with upstream research of s2d climate forecasting over different spatial and temporal scales, undertaken by the climate science community; this information will then be translated by midstream RE stakeholders (i.e., RE consultants) into useful and usable information for downstream RE investor stakeholders, which include both investors in RE projects and the energy grid system. In this way, ARECS will encompass nearly all of the pillars of the Global Framework for (GFCS): Research, Modelling and Prediction; Climate Service Information System; User Interface Platform and Capacity Development. The translation of s2d climate research involves producing a range of impact and risk studies to highlight the effect of future climate variability on the energy yields of RE projects. These assessments can then be applied by RE investors to adapt or reinforce their decision-making processes in light of newly identified climate risks. Such assessments can also stimulate new business markets, including innovative RE insurance covers that manage periods of high risk - i.e., periods of lower than expected climate resources leading to lower than expected energy yields and capitalise on periods of higher than expected climate resources leading to higher than expected energy yields. This information can also influence the design and management of the energy grid system, and the trading of energy, since climate variability creates inherent volatility in the RE yields that supply the grid. ARECS was created within the context of the European Commission s Seventh Framework Programme for Research (EU FP7), which organised the Climate Local Information in the Mediterranean Region- Responding to User Needs (CLIM-RUN) project. CLIM-RUN brought together and funded EU-wide teams of climate and RE stakeholder experts for this 3-year project, and from which the ARECS initiative was developed in early 2012 to further the outcomes of CLIM-RUN. ARECS is led by the Climate Forecasting Unit (CFU) at the Catalan Institute for Climate Science (IC3), who also lead the RE case study in CLIM-RUN, and in two other FP7 climate service projects due to start in late 2012 (EUPORIAS and SPECS). ARECS applies the upstream, advanced climate research developed by these EU projects to develop a downstream, operative s2d climate service for the RE sector. In this way, ARECS builds on and leverages the work of these three other EU climate service projects (CLIM-RUN, EUPORIAS, SPECS). While the ARECS initiative is predominantly focused on the European RE sector, the international scope of the RE market means that a RE s2d climate service has a potential global application. In the future, ARECS plans to work with the Climate Investment Fund (CIF) and the World Bank to promote climate services for the RE sector in the most climate-vulnerable developing countries. Target Audience The ARECS initiative provides advanced s2d climate information to target stakeholders within the RE sector. These stakeholders include midstream RE project developers and consultants who provide climate-related information or services to the downstream RE investors and RE policy makers. RE technology design engineers, energy grid infrastructure design engineers and managers, and energy traders can also utilise such climate information. Finally, the RE insurance sector relies on reliable climate information to provide new and improved RE insurance covers, that can help RE investors manage the risk posed to their investment, due to climate variability. 1 Seasonal-to-decadal climate forecasts range from a period of 1 month to 30 years, e.g. advanced climate assessment of the past months, years and decades, in order to forecast future climates at time-intervals from The s2d timescale is distinctly different to the more commonly reviewed climate change timescales, such as those of the International Panel on Climate Change (IPCC) that start from 40 years onwards, e.g See for more information 1

2 Climate and contextual information S2d climate forecasts, produced by climate scientists, serve as the scientific foundation of the ARECS initiative. The EU SPECS project (Seasonal-to-decadal climate Prediction for the improvement of European ) is due to start in late 2012 and is led by 3 the Climate Forecasting Unit (CFU) at the Catalan Institute for Climate Science (IC3). This project will design the new generation of European operational s2d climate prediction systems, and will be at the forefront of s2d climate forecasting research. SPECS will therefore contribute significantly to the GFCS pillar: Research, Modelling and Prediction. The CFU at IC3 is headed by Research Professor Francisco J. Doblas-Reyes, an internationally recognised scientist in the field of s2d climate forecasting. SPECS consists of 20 partners, many of whom are also international leaders in climate research such as the UK Met Office, Meteo France, the European Centre for Medium- Range Weather Forecasts, etc. The quality of the s2d climate forecast information is objectively assessed and systematically compared between the forecast systems available worldwide, while the physical processes at the origin of the prediction skill are studied using sensitivity and idealised experiments carried out by the climate scientists. This process is fundamental to 1) provide the user with objective measures of the forecast quality; and 2) improve the current systems to provide the most skilful and reliable climate information. For ARECS, future climate variability is probabilistically predicted using state-of-the-art global, statistical and dynamical climate models that produce a wide range of future climate information, including wind speed and direction (at different wind hub heights), surface solar radiation (diffuse and direct), temperature and precipitation etc. over seasonal and decadal timescales. The observational data required to initialise the prediction models is sourced via open-access, international climate databases, such as those housed by the ERA Interim at the European Centre for Medium-Range Weather Forecasts (ECMWF), and the National Aeronautics and Space Administration (NASA). Decision-making context The ARECS initiative addresses a range of decisions related to the RE sector. Broadly, ARECS evaluates the impact and risks associated with future climate variability, as well as the potential effect of these risks on the future energy yields of RE projects. More specifically, ARECS assesses the impact that identified risks may have on RE project investments, the integration of RE plants into the energy grid system, RE technology design, and energy trading. ARECS also facilitates the development of climate-related risk management strategies aimed at adaptation, including RE insurance packages, new RE technology design, and more robust RE project investment and grid development strategies. Climate information is used within many decision making processes of the RE sector: For instance, at the early scoping stages of a RE project, a thorough understanding of the climate resource availability (e.g. the wind speed, surface solar radiance etc.) and the locationspecific risk of variability from the current climate at inter-annual and decadal timescales is important for selecting an optimal RE site and investment timeframe. During the operational stages of the project, any change in the predicted energy yield will directly influence cash flow and therefore return on investment. Some projects are financed with up to 80% debt, and interest on the debt remains payable every year - whether energy is generated or not. There is therefore the possibility of considerable risk that not enough energy will be generated to pay down debt, with 4 investors particularly vulnerable in the first year of investment. It is also important to avoid the risk that revenue may consistently come in below their projections, in the case that actual energy yields fall short of their estimated levels during certain periods over the life of a RE project. These scenarios can also significantly affect the energy trading values of RE power on the financial markets. Similarly, the premium offered by the insurance sector to cover these, and other risks to energy yields due to climate variability depends on the quality of the available seasonal to annual climate information. For RE risk insurance, climate forecasts can explain the frequency and duration of periods of low energy yield caused by limited climate resource availability. The ARECS initiative aims to improve the availability and robustness of such climate information, in order to stimulate RE investment via new and cheaper insurance covers within the RE sector. S2d climate information is also key to strategically plan the capacity and location of the energy grid system, based on the geographical and temporal distribution of energy that comes from RE sources in the future. This can help to inform decisions about grid management in light of changing environmental conditions, volatile market contexts, and long-term trends in climate variability. In summary, medium-term s2d climate information enables stakeholders to prepare for and adapt to higher or lower periods of energy yields from one season, year, or decade to the next. For example, in the case of wind energy, it is useful to foresee and understand the impact of future wind variability, as well as the probability of extreme climate events such as high winds, floods, hurricanes, and their potential damage to technology and thus to energy yields. With more robust climate information, innovative insurance packages could be designed to best provide protection for the RE sector against such climate events during periods of identified high risk. Socioeconomic information Within ARECS, reports on the risks and opportunities of climate variability tailored for the RE sector are produced based on s2d climate forecasts, alongside a further assessment of their impact on the decision-making processes of RE stakeholders, as mentioned above. These assessments take into account a range of economic, political, technical and operational information that can be used to facilitate investment, innovation and planning at many different socioeconomic levels in business and society. For example, ARECS will provide information to strengthen assessments of whether a region or country The Economist (2011): Managing the risk in renewable energy, Economist Intelligence Unit on behalf of SwissRe, October

3 could be partially or totally self-sustainable in energy generation from RE sources over future s2d timescales. ARECS information can also assist the assessment of energy yield potential over the same timescales for RE projects or regions in new or unexplored markets, including those of developing countries. ARECS climate information can determine the probability of future risk to RE yields and/or grid system design at given spatial and temporal resolutions; they provide information on the past and future variability of RE climate resources and how this would affect the power output models for wind and/or solar plants at individual and/or correlated sites, since energy output is directly influenced by climate variability. All assessments are collated into reports that are made available via ARECS, alongside complementary studies that highlight possible adaptation measures, to be considered by the RE markets to mitigate risk from climate variability over s2d timescales. This information can also help a range of RE actors to identify and choose between RE adaptation measures, such as optimal future investment and operations strategies. It can also be used to propose new risk management tools; for example, innovative RE insurance covers for project energy yield risk due to climatic factors, that currently has a limited availability within RE investments. ARECS reports are sourced through collaborators that are already involved in the EU FP7 projects, such as the Potsdam Institute for Climate Impacts Research (PIK). Research partners in both the public and private sectors can also collaborate outside of the FP7 projects via the ARECS initiative (e.g. RE consultancies, academic RE research groups etc.) In this way, ARECS creates partnerships between public and private RE stakeholders to advance the upstream climate research and knowledge, in order to stimulate the development of a downstream, operational s2d RE climate service that communicates all of the various channels of climate and energy assessment themes mentioned above, and can apply them to real RE decision-making processes. Information Tailoring For both ARECS and FP7 projects, CFU climate scientists at IC3 tailor raw climate data to the requirements of the RE stakeholders to varying degrees of specificity. While climate forecasts represent variables that are relevant to RE at regional-wide geographic scales (e.g. Europe), they are not tailored to specific downstream users of the climate information such as RE policy or investment stakeholders that may require information at a regional-local scale. To determine the local variable, such as the wind speed, at a particular site, climate scientists use a technique called statistical downscaling, where a statistical relationship is established between observations and simulated large-scale variables, like atmospheric surface pressure. The climate science community does not, however, provide an operational service. Via ARECS, all climate information and techniques are communicated/ transferred to the project partners, who must further tailor the provided climate forecasts and their associated assessment studies depending on the specific needs of the different RE stakeholders (investors, insurers, grid operators, policy makers etc.). This can be done on a case-by-case level via the development of a downstream operational climate service for the renewable energy sector. An example is a study of the effect of future climate variability on investment in an individual RE site, which then explores the subsequent effect of integrating the RE project in question into the energy grid, and finally outlines how different investment strategies or insurance covers could help to lower the risks of the RE project and the energy grid system development of a region. RE consultants and large energy companies are already active in tailoring climate information in this way on a per-project basis (both RE and grid projects), but the use of s2d climate information is still relatively new to them. Via ARECS, climate scientists will interact directly with key RE stakeholders such as the consultants, to offer the information and training that will allow them to independently prepare climate forecast information over s2d timescales. In turn, this can then open new lines of business and opportunities to develop an operational RE climate service that can satisfy the needs of RE stakeholders to plan, invest and innovate for the global RE sector. Detailed look at service Processes and mechanisms Stakeholder identification RE stakeholders in the ARECS project include: midstream RE project developers and consultants who currently provide climate-related information or services to the downstream RE investors of both RE projects and the energy grid system, e.g., energy companies, banks, governments and RE policy makers. RE technology design engineers, grid infrastructure design engineers and managers, and energy traders also use this information. Finally, the RE insurance sector uses climate information to provide new and improved insurance covers to help RE investors to manage the risk on their investment due to climate variability. ARECS initially identified stakeholders who would benefit most from improved medium-term (s2d) climate forecasting information. These stakeholders were identified following one-on-one meetings at local RE companies, as well as through discussions held at different RE events, including RE conferences or trade-shows organised by the RE sector. These events attracted a variety of potentially interested RE groups and focused on topics such as RE project development, investment, and insurance. Whenever possible, ARECS presented its work and used basic climate and energy questionnaires to guide the conversations and to assess the RE stakeholder responses in order to understand the climate needs of the stakeholder, and to select key stakeholders for ARECS, based on how their needs aligned with what could be provided by a RE s2d climate service. The RE events allowed ARECS to reach large audiences and identify key stakeholders that were already using climate data, albeit not at s2d timescales, such as RE consultancies for climate resource assessments, RE project investors, and RE insurers. Because engaging with the larger downstream energy companies is very challenging, the decision was made to focus on the mid-stream RE stakeholders (i.e. RE project developers and consultants) during the initial stage of the ARECS initiative development. In the longer-term, this can facilitate access to the companies that were more difficult to engage at the start. 3

4 Issue Identification The Climate Local Information in the Mediterranean Region Responding to User Needs (CLIM-RUN) project was the first EU FP7 climate service project; its RE case study, led by the CFU at IC3, was one of three identified case studies within the project (wild fires, tourism, energy). Within CLIM-RUN a group of climate research experts and RE stakeholder research experts worked alongside each other to understand both the climate needs of the RE stakeholders and the scope of possible solutions given the current opportunities and limitations of climate forecasting. This information was used as the foundations of the ARECS initiative. Stakeholder Involvement ARECS leverages the climate research from the EU FP7 CLIM- RUN, SPECS and EUPORIAS climate service projects. Collectively, many of the RE stakeholder research experts and climate research experts established within each of the EU FP7 projects make up an open platform that forms the partners of the ARECS initiative, which is managed via the CFU climate services at IC3. Unlike these FP7 climate service research projects, ARECS aims to develop an operational s2d climate service for the RE sector. To achieve this, ARECS includes the RE stakeholders (e.g. the RE consultants, insurance companies etc.) in an integral role within the initiative, rather than a more collaborative role within some of the FP7 research projects. Information Dissemination Currently, ARECS information is made available online via the IC3 website ( ARECS uses RE s2d climate service descriptions and videos to engage RE stakeholders online, whilst the RE s2d climate forecast results and RE/climate assessment themes are communicated via technical papers and white papers. ARECS communication also includes the use of posters and presentations at RE events, and various media channels, both general and RE sector specific, to disseminate ARECS articles and press releases. The channels used by ARECS to facilitate access to its RE s2d climate information, products and services are provided in the box below: Channel 1: On-going dialogue between climate experts and RE stakeholders Core to the ARECS initiative is a two-way dialogue between the climate experts and the RE stakeholders, which is facilitated by an intermediate team within the ARECS partners that have knowledge of both the climate and energy sectors. All of these partners are directly involved in the ARECS initiative. The aim of this dialogue is to understand the RE stakeholder risk management strategies, via an insight into their decisionmaking processes and the way in which all types of risk affect these processes. Following an understanding of the general RE risk management strategies, the dialogue is also meant to elucidate ways in which climate information influences and is used within such strategies. The possibilities and limitations of s2d climate information is communicated to the RE stakeholders within the context of this dialogue. Similar one-on-one conversations at RE stakeholder companies, and wider reaching, group presentations at RE events and conferences are also used as a starting point for these two-way discussions. Channel 2: General RE climate service communications General communication of the ARECS initiative and its objectives is also facilitated both online and offline. In the case of the former, web-based information, blogs, and videos are linked to the IC3 ARECS webpage, RE stakeholder webpages (wherever possible), and to further, relevant online references, such as other climate research institutes, the ARECS partner webpages, or more general climate/energy-related webpages such as other European funded energy or climate projects (wherever possible). In the case of the latter, leaflets, mediarelated communications (press releases or technical articles), and different ARECS presentations tailored to specific audiences are used. Channel 3: Tailored RE climate service communications S2d climate-related information is tailored and communicated to the RE stakeholder via ARECS posters, technical papers and white papers. This includes the communication of all s2d climate forecast results and RE/climate assessment themes (e.g., a risk assessment of the impact of future climate variability for a RE project at a given site/region, or the potential for RE development at an unexplored RE location or locations, and the relationship between these locations to minimise the RE investment risk from climate variability.) Maps or timelines detailing climate forecast information for the previous season at key European RE locations is made available online via the ARECS website and is also sent via a quarterly newsletter to the ARECS mailing list (which includes all partners, as well as wider RE stakeholders, climate experts, and any other interested parties). Such climate information is always accompanied by the corresponding verification of the forecasts. As these climate forecasts only provide information on the past seasons, it does not serve as an operational tool for the sector but creates the necessary framework for all the actors to engage in a regular dialogue. Its purpose is to engage the RE stakeholders in the availability and potential use of a seasonal climate forecasts within the RE sector, with the aim that an operational s2d climate forecasting service is developed over time by some of the ARECS downstream partners. 4

5 Above all, it is important to note that the ARECS communication strategy is designed based on an on-going, iterative feedback process between all partners/experts from both the climate and energy sectors (both within ARECS and external to the initiative). This includes the responses from the newsletter, an online blog, the videos, (interactive) s2d climate forecast maps and various communications made via different media channels. Channel 4: Socioeconomic studies highlight the impact of s2d climate variability These studies are repeated for both the wind and solar RE sectors, and for all stakeholder types (outlined in the Target audience section). The findings of these studies are also fed back into the ARECS communication strategy to facilitate their dissemination to the wider climate and energy communities, via the different channels outlined above. Funding Mechanisms Business Model Within the ARECS program, funding for climate and energy research has come from public funds, with the largest share coming from the European Commission via the FP7 projects, with smaller public funds sought for some specific dissemination activities, such as the newsletter and webpage development. Funding to support the development of state-of-the-art global climate models and tools for s2d climate forecasting, the backbone of a s2d climate service, is expected to continue to come from independent, public sources such as EU programmes. On-going funding for the ARECS initiative is being sought from public sources, predominantly from EU programmes. This will enable the development of a solid ARECS partner consortium, and the modes of communication and dissemination of s2d climate information relevant to the RE sector both within the ARECS consortium, as well as to all external interested parties. In the long term (i.e., more than 5 years out), it is expected that ARECS RE stakeholders will see the benefit of a fully operative s2d RE climate service and will therefore continue to fund the ARECS initiative, which will continue to have the central role to develop and disseminate advanced s2d climate forecasting techniques and communications, required to transfer knowledge from upstream climate research communities, in order to continuously improve and build upon the downstream RE, operational climate services. The development of an operational s2d climate services, facilitated by the ARECS initiative, will also build upon the current, general business model of many RE climate resource assessment consultants in the RE sector. These consultants already provide a comprehensive analysis of past climate information to RE investors to help facilitate the decisionmaking processes that are related to their investment risk management strategies, by understanding the context of climate on the predicted RE yields, and thus the return on investment, within these strategies. The use of advanced s2d climate information is, however, very limited within RE consultancies. To encourage stakeholders to provide this necessary, longer-term funding, the value and relevance of a RE s2d climate services must be demonstrated throughout the early stages of research and development via ARECS and the climate research FP7 projects that it leverages. As mentioned above, the continuation of the ARECS activity toward the ongoing improvement and development of a s2d RE operational climate service, will also require the consolidated s2d climate research skills to be transferred from the climate research and development centres to the RE consultants. This may require a professional exchange scheme or training programme between research and private entities, which can facilitate transfer of knowledge for s2d climate forecasting techniques and s2d climate variability impact assessments on RE yields, financed either within public or private funding programmes. Financial Sustainability In the short term, there are few challenges to the financial sustainability of the ARECS initiative, as funding has been partly secured for its initial phase via EU FP7 projects and smaller, national public funding programmes, and includes the development, dissemination and communication of s2d climate forecasting to the downstream RE stakeholders. The long-term investment by stakeholders in the ARECS initiative will largely depend on the successful on-going development of climate models and tools, in order to forecast climate variability over s2d timescales with increasing skill (something that the EU FP7 SPECS project, coordinated by the CFU, will address in particular), and the successful dissemination and application of the s2d climate predictions within the RE sector via ARECS. Scaling up the project RE is a rapidly growing global industry, so there is a great potential to develop the ARECS initiative to cover different geographical regions, temporal horizons, and more types of stakeholders. There is also considerably more sociological and economic research that can be undertaken to qualify and quantify the role of climate services within the RE sector, by understanding the impact of climate variability to the RE sector, the economic and social costs associated with the potential risks and opportunities identified within these impact studies, and how a s2d climate service can help to manage the risks, and capitalise on the opportunities. The climate service protocol and methodologies developed within the ARECS framework can also be applied to many other sectors that are influenced by climate over s2d timescales, such as agriculture, water management, health, natural disasters etc. Implementation Decision making Within ARECS, the CFU acts as the coordinator to ensure the delivery of specific outcomes between the partners. Where key decisions need to be made, it is first the responsibility of the CFU to initiate a dialogue with other partners or stakeholders, to facilitate an appropriate and agreed outcome. There are three dedicated RE climate service teams within ARECS, that include: the Climate Expert Team: CET, the Stakeholder Expert Team: SET, and the Partner Interaction Team: PIT. 5

6 In the CET, leading climate scientists have combined efforts to further the development of climate models and tools that can improve the predictability of future climate variability over s2d timescales. In the SET, downstream RE stakeholders that will ultimately be the users of an operational, s2d RE climate service (e.g. the RE investors, such as large energy companies or banks with a RE portfolio, as well as governments that are investing in RE projects and the central grid system development) will apply the RE s2d climate services and products to be developed within ARECS to their specific RE investment portfolios. This will help to quantify and qualify the value of a s2d RE climate service over time, as RE investment decisions may be influenced with the availability of additional s2d climate information, that was previously not available to the RE sector. In the PIT, representatives of the RE industry such as RE consultants, and from the climate science sector - many of whom have a background in both climate science and business - sit between the CET and the SET ARECS partners to facilitate a 2-way feedback between these teams, in order to effectively disseminate and communicate the climate information from the CET to the SET partners. The PIT can develop and shape the climate impact, risk and opportunity studies (both social and economic), and provide reverse feedback from the SET to the CET regarding the on-going development of s2d climate forecasts for the RE sector. An on-going dialogue between the stakeholders and the project partners is achieved via the communication strategies outlined previously. All teams discuss this iterative feedback process during regular Skype meetings and project meetings, which are held up to twice each year. Institutional Involvement The CFU unit at IC3 leads the ARECS initiative, following on from their role as the RE case study leader within the EU FP7 climate service project CLIM-RUN, EUPORIAS and SPECS. These projects join many climate and energy groups from both the public and private sectors, to facilitate the exchange of climate and energy data, research and information. The CFU is therefore responsible for coordinating the overall s2d climate service initiative for the RE sector within the context of the FP7 projects and the ARECS initiative. Within the FP7 projects and the ARECS initiative, there are a number of organisations officially involved in the development of a RE s2d climate service. The confirmed institutions to date and their roles are in the box below: The Catalan Institute of Climate Science, IC3: Climate Forecasting Unit, CFU (Spain) Role: S2d climate forecasting, RE climate service communication and dissemination activities, ARECS coordinator and lead member of the CET and PIT. National Agency for New Technologies, Energy and Sustainable Economic Development, ENEA (Italy) Role: Climate forecasting for the RE sector, climate impact studies for RE project investment stakeholders, member of the CET and PIT., Potsdam Institute for Climate Impact Research, PIK (Germany) Role: Climate impact studies for the effective integration and investment of electricity produced from RE sources into the RE grid system, lead member of the PIT. Cyprus Institute: Energy, Environment and Water Research Centre, EEWRC (Cyprus) Role: Climate forecasting for the RE sector, member of the CET. Croatian Meteorological and Hydrological Service, DHMZ (Croatia) Role: Climate forecasting for the RE sector, member of the CET. United Nations Development Programme, UNDP (Croatia) Role: Climate impact studies for RE project investment stakeholders, member of the PIT. UK Meteorological Office (UK) Role: Climate forecasting for the RE sector, climate impact studies for RE project and RE grid investment stakeholders, member of the CET and PIT. Evaluation The evaluation of the quality of climate forecasts produced for the ARECS initiative is central to climate sciences. Climate prediction systems produce forecasts for as many cases over past-timescales as possible, which are assessed against the best observations available. Different forecast quality measures, such as the correlation of the mean predictions with the observed data, are systematically used. By default, all s2d forecast systems include this validation process, which is then communicated along with the level of uncertainty of the predictions via probabilities. The value of s2d climate forecasts for the RE sector is demonstrated by the various impact studies of climate variability on RE yields. These impacts are further translated into an assessment of the potential risks and opportunities, due to climate variability, on the RE sector for both RE project and the RE energy grid investment and management. In all circumstances, reference will be made to the decision-making processes of the RE stakeholders with and without the additional s2d climate information, so that an assessment can be made of its added value to RE stakeholders. An evaluation of RE stakeholder interaction with different communication modes (newsletter interest, website visits, number of downloads of technical papers/media articles etc.) is incorporated within the ARECS assessment process wherever possible. In the longer-term, the success of the service will be evaluated via the continued engagement of RE stakeholders, and their request for a fully operative RE s2d climate service. 6

7 User Feedback The RE s2d climate service developed within ARECS is evaluated via an on-going, bottom-up feedback process, beginning with the RE stakeholders. RE stakeholders, such as RE climate resource consultants, RE insurers or RE investors, with an operational or business benefit from using s2d climate forecasts are central to the feedback process to evaluate the success of the RE climate service. Such RE stakeholders are therefore directly involved in ARECS, in order to facilitate the feedback process. Throughout the ARECS initiative, feedback is collected following all ARECS presentations that are given at climate or energy events, or via the ARECS online blog, responses, or even simply one2one discussions with RE stakeholders. Funding Mechanisms Existing Capacities Existing capacities can be distinguished in a number of different ways. Human capacities: A central coordinator or project manager has been key to guide the development of ARECS and engage with RE stakeholders, who are the users of climate information, as well as with the climate scientists. Most importantly, the coordinator serves to bridge the gap and facilitate the flow of information between the RE stakeholders and the climate scientists. S/he must have skills and experience in the communication of technical or scientific information to key stakeholders within the RE sector. As s2d climate forecasting is a relatively new and challenging subject, clear, concise, and careful communication of both climate results and their usefulness / limitations within the RE sector is essential. Other human capacities are important as well. S2d climate experts are needed to produce the climate information and its evaluation, as well as to develop the necessary climate models and tools for the ARECS initiative. In addition, the establishment of the CET, PIT and the SET has been essential in facilitating the coordination and management of the ARECS initiative. Institutional capacities: In order for initiatives like ARECS to succeed, institutional connections within and between the climate research community and the RE stakeholder community are key. In this case, these connections were established by recruiting a project manager into the climate research sector who had experience within the field of renewable energy. By creating links with RE stakeholder institutional bodies, maintaining a presence at relevant events, and pro-actively creating new contacts, the project manager was able to maximise contact with potential ARECS partners. Links with economic and socio-economic institutes have been particularly important for the incorporation of s2d climate information into impact studies. The direct involvement of RE stakeholders outlined in the Target audience section within the ARECS initiative, which includes seeking financing for their dedicated involvement, greatly facilitates the application of these impact studies to real decision-making processes, as well as to scope the potential for, and management of an operational downstream s2d RE climate service. Finally, any involvement within the wider climate service framework, such as the Global Framework for and the Climate Services, has been very useful to share ideas, establish procedures, avoid duplications and contact with the same RE stakeholders. Funding capacities: External sources of funding are also important in the development of a RE climate service, especially during the establishment phase when its value needs to be demonstrated to the RE stakeholder groups in order to gain long-term support. It is therefore key to connect to climate- and energy-related funding programmes at all geographic scales, from local to European opportunities in both the public and private sectors. Procedural capacities: Core to the development of ARECS is the initiation and on-going dialogue between climate scientists and RE stakeholders (i.e. the users of climate information). It is therefore important to engage both sides in a clear and concise strategy, and to request feedback and modifications on a continuous basis, which in ARECS is facilitated by the PIT members. Creating opportunities to communicate and receive comments, such as a newsletter, or an online feedback form is also very useful. One of the most important procedural aspects of the development of ARECS involves communicating uncertainties of each s2d climate forecast, and the consistent presentation of climate results and impacts to the RE sector. This avoids creating unnecessary confusion, or misrepresentation of the climate data amongst the targeted RE stakeholders. The methodology chosen to communicate uncertainty by the IPCC will be used as a basis for this assessment. Existing capacities in the RE community: Most of the RE sector is familiar with climate information because climate data for wind, solar, or hydro resources are a core part of the initial economic assessment for all RE investments. However, excluding large, international RE stakeholder companies, few organisations use detailed or regularly updated s2d climate forecasts, and those that are used are unlikely to be at the forefront of s2d climate research as undertaken within EU FP7 research programmes. Research on the cutting edge of s2d predictions is predominantly undertaken within climate research institutes, and RE stakeholder groups are often not engaged. That is, external collaborations with the RE sector is relatively minimal. An ongoing dialogue between climate information providers and its users is therefore essential to create an effective climate service, and is what the ARECS initiative aims to achieve. Capacity Gaps The capacity gaps can be divided into two categories, which are outlined below. Challenges to building the service: Sharing s2d climate research and results with RE stakeholder businesses was very challenging initially as the two sectors were not linked. This obstacle was overcome in several ways. First, at the start of the ARECS initiative, the project manager developed a cohesive communication and marketing strategy that extolled the potential of s2d climate forecasting within the RE sector. This strategy used presentations, leaflets, videos, and the ARECS website and an ARECS newsletter. The project manager also established and developed informal partnerships between individuals working in other climate services and sciences, facilitated by the EU FP7 projects, as well as with different RE stakeholders. The project was also challenged by the fact that there were limited personnel able to undertake in-depth impact studies for the RE 7

8 The project was also challenged by the fact that there were limited personnel able to undertake in-depth impact studies for the RE sector using climate research and information. These studies were essential for engaging stakeholders in the value of a s2d RE climate service throughout the development of ARECS. This limitation was overcome via informal partnerships within the field of socio-economic climate impacts and energy research institutions, and potential partnerships were often found within other climate and energy research projects funded by European programmes. While interaction with RE stakeholders was key to the development of ARECS, it was often limited due to the traditional tendency for research institutes to stay isolated within the scientific community. To reach a wider audience, ARECS sent climate service representatives to attend the events and conferences of RE stakeholder groups and give presentations or to show posters whenever possible. Climate modelling resource capacities were also limited due to the cost of the supercomputers that are used to produce the required s2d climate forecasts. This is a common issue within the climate science community, and was overcome by obtaining competitive computing time from other climate research institutes across Europe (such as the European Centre for Mid-Range Climate Forecasts, ECMRWF, in Reading, UK) that maintain larger and more powerful supercomputers. This is a strategy that will be further explored by the SPECS project, given that a new generation of very large supercomputers is being made available to scientists across Europe. Challenges to Meeting user needs: RE stakeholders often want climate information tailored to a near-exact time and place, such as wind speed for the afternoon of a specific date at a specific site. Unlike weather forecasts, however, climate information does not provide this level of detail. It was important to make users understand that ARECS s2d climate information illustrates general trends, showing the variation in climatic conditions over a longer period of time than any individual hour or day. Similarly, the usefulness of typical climate information at coarse spatial resolutions is very limiting for RE stakeholders, who want information for a specific geographical site, as previously mentioned. This aspect must be overcome by the climate science community, and a large amount of work is currently underway within the EU FP7 climate service projects (especially SPECS and EUPORIAS), which will feed into the ARECS initiative, to improve the skill of downscaling climate information to higher spatial resolutions according to the feedback provided by the SET. Downscaled climate information can then be used by the RE stakeholders of specific projects or regions. Since s2d climate forecasts are at the forefront of climate sciences, their skill, especially over Europe, is often limited, which is another challenge when engaging with RE stakeholders. This is not to say that there is no value in the forecasts, and initial examples have been prepared by the CFU demonstrate that there is a good potential for useful s2d forecasting of RE climate resources. One of the most important aspects of the development of ARECS involves communicating the uncertainty of each s2d climate forecast in a probabilistic way, so that RE stakeholders can clearly understand and apply the climate information, where appropriate, to their decision-making processes in order to manage the potential risks and opportunities of future climate variability. Looking towards the future Goals for the future The primary aim for the future of the ARECS initiative is to continue to facilitate the use of s2d climate information within the RE sector so as to further build capacity and reduce the risks caused by climate variability. This will be achieved by preparing and adapting the RE sector to the impact of climate variability on the energy yields of RE projects and the RE grid over s2d timescales. The engagement of RE stakeholders is an on-going, but vital part of this goal. Social and economic impact studies and clear, concise and regular communication of studies that utilise the s2d climate forecasting results, as well as a continuous interaction with RE stakeholders via an on-going marketing and communication strategy is central to effective engagement. The on-going advancement of climate modelling and other related tools (e.g., downscaling techniques, probabilistic prediction to fully address risk), is also an important goal for the future development of ARECS. By working with and transferring knowledge from the climate research sector to existing RE climate resource consultancies, s2d climate forecasting at a research level can also be used to build upon their existing weather and climate services, to stimulate an operational RE s2d climate services further downstream the RE value chain. This could greatly advance the RE sector and help institutions to understand and minimise the potential risk caused by climate variability. Project Expansion It is definitely possible to scale up the ARECS initiative. Renewable energy is a rapidly growing, global industry, and there is a great deal of interest in developing the ARECS initiative to cover different geographical regions, temporal horizons, and a wider variety of stakeholders. There is also considerably more socio-economic research that can be undertaken to qualify and quantify the role of s2d climate services within the RE sector. Lastly, the climate service protocol and methodologies developed within the ARECS framework can also be applied to many other sectors, such as agriculture, water management, health, natural disasters etc., which are influenced by climate over s2d timescales. Lessons learned There were many successful strategies used throughout the initial development of the ARECS initiative. Firstly, the program began by establishing an understanding of its RE stakeholders decision-making processes, to ensure that a s2d climate service would be well suited to their needs. In doing so, it recognised that climate was often not the most important issue to RE stakeholders, and it therefore put effort toward identifying RE stakeholders sensitivities, thresholds, and risk tolerance related to climate within their decision-making processes. Secondly, ARECS was transparent regarding the uncertainties surrounding the climate forecast information provided, which helped to develop stakeholders trust and maintain credibility. Lastly, once the decision-making processes were well understood, ARECS maintained clear, consistent and regular communication 8

9 regarding the climate research results and how they could impact stakeholder investments. There were many other things that did not work well at the start of ARECS. For example, potential stakeholders were often overwhelmed and confused by in-depth explanations regarding the details of climate models and climate forecasts. These explanations can be difficult to articulate clearly and concisely - it is important that stakeholders understand the limitations and uncertainties surrounding the climate service - although this must be communicated effectively to be useful to RE stakeholders. In general, ARECS found it most effective to give less detail on technical processes of the climate forecasts and more on the utility of the information as it relates to RE investments. Similarly, ARECS tried unsuccessfully to engage stakeholders by inviting them to climate events. It was also assumed that stakeholders read climate-related media. Instead, ARECS found that it was more important to attend stakeholder events and communicate with their media to gradually and consistently introduce a climate service to their communities. RE climate services could be applied across the globe, and the lessons learned here can definitely be transferred to other sectors. Although the stakeholders may be different, the challenges faced when trying to engage with and understand the decision-making processes of any stakeholder affected by climate are universal. Moving Forward Initiating and maintaining the engagement of RE stakeholders in the development of the ARECS initiative is likely to be an on-going challenge. This is largely because climate information is often not of paramount importance compared to other aspects, such as the uncertainties of RE political frameworks or efficiency of RE technologies, that can greatly affect a RE stakeholder investment decisions. It is also challenging to engage RE stakeholders because of the common conception that medium-term climate forecasting is both inaccurate and unreliable. It will therefore be important to stay engaged with the RE stakeholders and build a mutual understanding regarding the realistic scope of an operational, s2d RE climate services, and the value that it could add to the sector. This in turn will create an optimal development plan that serves all parties involved in the ARECS initiative. The skill and scope of climate science is also challenging for the development of any climate service, but as research and development in climate forecasting rapidly grows, climate services will continue to take advantage of these advancements. Principles of the GFCS Principle 1: All countries will benefit, but priority shall go to building the capacity of climate-vulnerable developing countries. Since the renewable energy sector operates within the global market it provides important opportunities for both developing and developed countries to overcome their current energy challenges. That is, climate services for the renewable energy sector will be of significant benefit to all. Although the largest renewable energy stakeholders, particularly investors and project developers, are based in developed countries, their operations are often global. The creation of a RE climate service is therefore not limited to any specific country. By working with the needs of the largest, most globalised stakeholders, climate information for the development of a s2d RE climate service can also be focused on the most climate vulnerable developing countries. In addition, the future energy sector, which universally has set strong global targets for increasing RE capacities over the coming years and decades, and, as a sector that is central to the successful development of many societies, can therefore also be considered as one of the most vulnerable sectors of society. ARECS also plans to work with the World Bank and the Climate Investment Funds (CIF) to direct the development of a RE s2d climate services to include such climate vulnerable developing countries. Principle 2: The primary goal of the Framework will be to ensure greater availability of, access to, and use of climate services for all countries. The ARECS communication platform is a primarily Internet-based, with open access for all individuals and countries. Where communities have limited access to the Internet due to poor telecommunication infrastructure, ARECS will work with partner organisations such as the CIF and the World Bank, or with global RE stakeholders in order to facilitate the use of climate information for all countries. Principle 3: Framework activities will address three geographic domains: global, regional and national. As previously stated, renewable energy and related climate services participate in the global market, but must span geographic domains from local provision to global dissemination. 9

10 Principle 4: Operational climate services will be the core element of the Framework. The RE sector already uses operational climate information, which is disseminated to RE stakeholders through private consultancies. Such operational RE consultancies are the core stakeholders of a RE climate services, although they are currently lacking the inclusion of climate information over s2d timescales. The development of a s2d RE climate service, and the advancement of research in this domain will complement the existing RE operational activity, by providing more complete and robust climate information for the RE sector. Principle 5: Climate information is primarily an international public good provided by governments, which will have a central role in its management through the Framework. The development of climate services via the ARECS initiative will be primarily funded through European FP7 projects, not private resources, and will therefore remain an international public good. In order for the climate service to remain credible, it is important that it largely remains a public good provided by governments. Principle 6: The Framework will promote the free and open exchange of climate-relevant observational data while respecting national and international data policies. The development of RE climate services depends largely on the free and open exchange of climate-relevant observational data. The ARECS initiative will not charge for any of its reports or services, and will therefore continue to promote open access to the climate service as well as the climate data. Principle 7: The role of the Framework will be to facilitate and strengthen, not to duplicate. The provision of s2d climate information is new and innovative in all sectors. Therefore, the ARECS initiative, focused on s2d timescales, will only add to and strengthen the climate services that already exist within the RE sector. The risk of duplication by other climate service initiatives at local, regional and national levels, both within the RE sector and other sectors, is avoided by working within frameworks such as the GFCS, the CSP and European climate service projects, so that on-going communication and transfer of knowledge is maintained within the climate service communities. Principle 8: The Framework will be built through user provider partnerships that include all stakeholders. The inclusion of RE users or stakeholders is central to the ARECS initiative, and is initiated from the outset by the CFU that acts as the ARECS coordinator. There is an on-going focus on the continuous interaction between climate forecast users (the SET) and providers (the CET) within ARECS, with key communications centred on facilitating a two-way transfer of knowledge (the PIT). The development of the RE climate service is very much perceived by both climate forecast providers and users as an iterative process, where feedback and learning from both sides actively contributes to the revision and adaptation of the climate service. Additional Reading There are very few examples of the use of s2d climate forecasts within the RE sector. The following references are examples of how the provision of climate information can facilitate adaptation to climate variability within the renewable energy sector. Pascal J.M, A. Troccoli (2010) Can we trust long-range weather forecasts?. Management of Weather and Climate Risk in the Energy Industry nato_arw/arw_book/climate_energy_book_troccoli_ch15_mailier.pdf Marco1, J. M., C. Triviño, G. Gil, A. Garrad, L. Landberg (2011) / How to determine the Portfolio Effect based on wind regime dependency: European examples. Garrad Hassan Ibérica S.L.U., Spain. Ren, D. (2010) Effects of global warming on wind energy availability. J. Renew. Sustain. Energy, 2, Troccoli, A., M.S. Boulahya, J.A. Dutton, J. Furlow, R.J. Gurney and M. Harrison (2010) Weather and climate risk management in the energy sector. Bull. American Meteorol. Soc., 91, Williams, A (2011) Hedging Against Wind Variability: A Risky Business?. RenewableEnergyWorld.com Jaramilloa, P et al.(2011) Quantifying the hurricane risk to offshore wind turbines. Proceedings of the National Academy of Sciences of the United States of America. International Energy Agency (2011) Risk Quantification and Risk Management in Renewable Energy Projects Renewable_Energy_Projects Swiss RE (2011) Managing the risk in renewable energy 10