Following Winter 2015-16's record-breaking warmth, the upcoming winter is expected to offer considerably more variability. Weak La Niña conditions should drive more sustained cold, particularly during the latter half of winter, resulting in stronger energy demand across much of the United States east of the Rockies.
Winter 2015-16 Recap
Winter 2015-16 started off on an exceptionally bearish note. December 2015 verified as the warmest on record, posting an incredible average national temperature anomaly of +6°F. January 2016 featured increased variability with warm anomalies retreating to the northern tier of the United States. A notable event was the January 22-24 blizzard that unleashed crippling snowfall totals in the Mid-Atlantic region. February 2016 closed meteorological winter on a warmer note, with warm anomalies overspreading the bulk of the major population centers. Despite this warmer shift, a transient yet powerful Valentine’s Day cold outbreak impacted the Northeast. Temperatures in Boston tumbled below zero with wind chills approaching -30°F, driving a sharp boost in energy demand.
Winter 2016-17 Forecast Drivers and Key Risks
One of the driving forces behind Genscape’s 2016-17 winter outlook is the expectation for a weak La Niña to persist through the winter months. Historically speaking, La Niña patterns correlate with below-normal temperatures across the northern U.S. along with above-normal temperatures across the southern U.S. Complicating this signal is the presence of anomalously warm Atlantic sea surface temperatures, known as a +AMO (Atlantic Multidecadal Oscillation), which correlates to warmer temperatures across a sizeable portion of the continental U.S.
Due to the fact that very few analog years match the current distribution of sea surface temperatures in the Pacific and Atlantic, Genscape's analog years consist of a blend of these conditions. Among the top years used in this outlook are the winters of 1983-84, 2005-06, 2013-14, and 2014-15. These analog years favor back-loaded winter cold with a mild December, followed by increased coverage of below-normal temperatures from January into February and March. Below-normal North American snow cover to start winter along with the potential for a strong Pacific Jet Stream to persist pose warmer risks to Genscape's outlook. Additionally, a small subset of La Niña winters feature a substantially warmer look to February, adding risk that a back-weighted winter cold may underperform.
East Coast (ISO-NE, NYISO, PJM)
Generally below normal temperatures are expected across the East when looking at the winter as a whole. Despite the overall cold signal, it is expected to be a slow transition from the prolonged warmth experienced this fall. The December pattern looks to be volatile, with above-normal temperatures followed by brief cold snaps throughout the month, before the cold air outbreaks increase in both frequency and longevity for January and February. This leads to expectations of higher peak demand year-over-year for ISO-NE, NYISO, and PJM.
Midwest and Lower Mississippi Valley (MISO)
The Upper Midwest is expected to be the focus for colder-than-average temperatures as the winter unfolds this year. While the winter is expected to be volatile, colder-than-average temperatures are expected to take time to develop. MISO peak demand expectations are significantly higher (7.5 percent) than last year’s weak winter peak. Significant cold is expected to hold off until January, and the winter peak is expected to occur during the second half of the month as cold deepens heading into February. The South is expected to remain closer to seasonal temperature levels through the winter, which should keep MISO demand from reaching the all-time winter peak levels seen in January 2014.
Plains (SPP, ERCOT)
After experiencing an exceptionally warm winter last year, the upcoming winter is expected to offer colder temperatures and more pattern variability. This should lead to stronger year-over-year demand for both ERCOT and SPP. More specifically, Genscape's peak winter load forecast for ERCOT and SPP calls for year-over-year demand increases of 7.5 percent and 5.1 percent, respectively. While winter is expected to get off to a rather slow start in December, an increasingly amplified Polar Jet Stream should bring more sustained cold to the Plains from January into February. Forecasts risks generally lean warmer across the Southern Plains, including ERCOT, if a more pronounced warm La Niña signal becomes established.
West (CAISO, WECC)
While most of the country anticipates a bearish start to Winter 2016-2017, CAISO begins the season with an anomalous cold pattern with peak heating demand occurring in the first half of December. In contrast to last year, weak La Niña shifts the subtropical jet into Northern California and the Pacific Northwest, where a continuation of anomalous fall 2016 precipitation continues through December. Warm anomalies then return to California by late December and persist through the end of winter. Healthy water and snowpack levels return to Northwest Hydro after a record-setting fall, with seasonal conditions returning through winter.
In summary, Winter 2016-17 will offer a much colder outcome than Winter 2015-16. Cold temperature anomalies will be focused across portions of the Upper Midwest, Great Lakes, and Northeast, with warm anomalies stretching from the Desert Southwest northward along the West Coast. Above-normal precipitation is expected along the Eastern Seaboard, resulting from an active storm track. Meanwhile, below-normal precipitation is forecast for portions of the Desert Southwest into Southern California.
Weather can have a large impact on power demand and generation, especially with the seasonal extremes seen across the U.S. in the summer and winter months. Being able to anticipate weather patterns for the season ahead can help market participants make more informed trading or business decisions. Click here to learn more about the full range of Genscape's Power Market services.