Economic Forecast Review
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Transcript of Economic Forecast Review
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Economic Forecast Review
ERCOT
Calvin Opheim
October 12, 2012
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Outline
• Forecast Overview
• Economic Forecast Review
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Forecast Overview
To create a long-term load forecast requires:
i. Employment or economic data forecast for each county for the duration of the forecasting time-frame
ii. Hourly weather forecast for each weather zone which will be used for each forecasting year
These values are used by forecasting models to create the hourly demand forecasts for ERCOT
The employment forecast drives the long-term energy and demand forecast since the weather forecast is constant
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Economic Assumptions
Moody’s provides ERCOT with three county-level economic forecasts:
i. Base
ii. High economic growth
iii. Low economic growth
Which forecast should be used?
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Moody’s Non-Farm Employment Scenarios – 11/8/2011
2000 to 2009 0.9% AAGR
2009 to 2022 AAGR
Low 1.8%Base 2.3%High 2.8%
AAGR – annual average growth rate
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Moody’s Non-Farm Employment Scenarios – 11/8/2011
2012 to 2015 AAGR
Low 3.2%Base 3.7%High 4.3%
8/30 update 3.3%
AAGR – annual average growth rate
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Energy and Non-Farm Employment
AAGR – annual average growth rate
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Historical Non-Farm Employment Forecasts (low case)
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Historical Non-Farm Employment Forecasts (base case)
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Historical Non-Farm Employment Forecasts
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Historical Non-Farm Employment Forecasts
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Actual Non-Farm Employment Data
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Summary
• ERCOT reviews the non-farm employment forecasts
• ERCOT has added an additional provider of economic data (Woods and Poole) in 2012
• ERCOT is exploring receiving additional economic forecasts from Moody’s
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Questions
ON
OFF