Energy Information on the Web

Anne Ku13 December 2000

London Business SchoolModelling and Managing Competitive Electricity

Markets

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Information to reduce, resolve, or remove

• Regulatory• Political• Scientific• Economic

• Uncertainty• Unfamiliarity• Controversy

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“You don’t need to take a course. By now, you should be able to do your own research and ask a few intelligent questions.”

Derek Bunn, 1993 in response to Anne Ku’s

request to take courses in energy policy and

modelling

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Lo and behold the Internet !

• All day long, all year round, everywhere• Shifting costs from producer to consumer

– printing and distribution TO– dialling up/logging on, searching, printing

• Search engines, directories, guru links• Companies, trade groups, government

bodies, universities/research institutes• Publishers, consultants, advisors

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Finders keepers. Losers weepers.

Information is costly to produce but cheap to reproduce." - Shapiro & Varian, Information Rules, 1999

With the Internet, it’s cheaper still for the producer” - Anne Ku

(while the information seeker suffers from anxiety and frustration of searching on the Internet OR information overload.)

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Does free information have any value?

There is a perception that the more easily available and the later we come to know of its existence, the less useful (less valuable) is the information to us at that point in time. Thus, we perceive an inverse relationship between value and availability of information:

Low value for FREELY and widely available, give-aways, public, known for a long time, known by a lot of people, information that does not require much processing.

High for EXPENSIVE, difficult to come by, scarce, organised, young or fresh (just released), secret, a lot of processing required (effort to get the information).

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Why would information be provided free of charge?

• Publicity: press releases, “about”, reduce transaction cost of servicing frequent enquiries

• Credibility: expertise, writing/research style

• Teaser: example of more to come, trial subscriptions

• Traffic: advertising revenue, community, stickiness, cross sells

• Good will, but it helps you in the end

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Perceived value of information related to transaction costs of information• Acquisition effort:

how much you paid for it (if not free), how hard to find it, how long you had to wait to get it

• Shelf life: length of time the information is still valid and useful

• Frequency of release: irregular or regular; one-off, real-time, slow-time

• Time to release: process/production time• Time and effort to comprehend and digest

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All things considered• Relevance: the right information, in the right format, quality,

level of comprehension, at the right time

• Comprehensible: understandable, writing style

• Comprehensiveness: complete, no loop-holes, well-referenced

• Cognitive economy: limitation of the brain to remember things and deal with complexity; how to avoid information overload

• Type/purpose of information: marketing/PR, educational, update/informative, insightful, perception/opinions, factual

• Convenience yield of research: having it there when you need it, thus no need to look for it (cost of storage)

• Reliability, credibility of source

• Perception of source: independent, objective vs biased, subjective

• Depth vs breadth of coverage

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The A, B, C’s of energy topicsDeregulation:restructuring issues,progress, policy, legislation

Generation: energy sources(coal, gas, etc), technology,microgeneration, operations,ancillary services

Environment, energyeffi ciency, emissions,renewable energy,climate change

I nformation Technology:ASP, CRM, CI S, tradingplatforms, MI S, DSS,sof tware/ hardware, XML,MRO, CAMS, GI S

Power plant:load management, loadforecasting, demand sidemanagement, performance

Risk management:

price risk, volume risk,counterparty/ credit risk,value at risk, the greeks,enterprise risk mgt systems

Trading:online, brokers, cross-border, scheduling, prices,information, integration,clearing, settlement

Transmission /

distribution:transmission pricing,congestion management,power factor testing

Weather andEVERYTHI NG ELSEscientific reports, M&Aactivity, J V, strategy, web-initiatives

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Types of informationfrom the objective to the subjective

• News: who, what, when , where, why• Data: what• Analysis: what, why, how• Government and regulatory bodies:

“consultation documents” or “notice of proposed rule making”, policy, legislation

• Research reports, magazine articles, features, letters, opinions, discussions

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Energy News

• Specialist energy only– Platts, Sagewave– Reuters Energy Briefin

g– Petroleum Argus– Dow Jones Energy– FT Energy

• Multi-sourced– Energy Central– Energy Online

• Generalist news provider with news about energy– New York Times– Wallstreet Journal– Financial Times– CNN– BBC

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Energy Data

• Period– Historical time series (Platts, FT Energy/RDI)– Real-time (energy news providers, energy exchanges)– Forecasts (DRI, CERA, EIA, WEFA)

• Type of data– prices– volume (supply, demand)– plant outages– weather – power plant operational statistics

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Energy Analysis• Publications: daily, weekly, fortnightly, monthly, bi-monthly, quarterly

Utilities Week, Public Utilities Fortnightly, EPRM, Hart Energy Markets, Global Energy Business, Commodities Now

• Consultants: individuals such as Stoft, energy specialists such as Scientech, the big ones all have energy/utilities practices

• Universities: Univ of California, Stanford, Harvard, LBS

• Trade/professional associations, lobby groups: EEI, EA, IAEE, EurElectric, EFET, WRMA, BWEA, TURN

• Government: EIA, OFGEM, CEC, FERC

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Types of information seekers

• Type 1: value-focussed

• Type 2: alternative-driven or new to the game

• Type 3: hybrid

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“I know what I want, but I just can’t find it.”

• Knowledgeable, specific• No time to scan or window-shop• Willing to pay• Convenience yield of research very high: have

the information available when you need it• Examples: researchers, consultants, speakers• Solutions:

effective search engines, search strategy, clipping service, paid subscriptions,

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“I think I know what I want, but I’m open to suggestions.”• Like to browse and surf• Learning mode, window shopping• Examples:

Newcomers to energy, magazine editors looking for good ideas

• Solutions: “push media” such as newsedge or pointcast, email subscriptions, click-through links, guru sites.

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“I don’t know what I’m looking for, but I’ll recognise it when I

see it.”• Can’t articulate exactly what they need• But want to be reassured that they have

everything they need• Real-time more important than historical• Examples: typical traders, top executives• Solutions: organised, categorised information

such as table of contents, directories, index of links, critiqued/quality controlled filtered information, in-house decision support system. Expensive subscriptions to real-time news services.

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“If you don’t know where you’re going, any road will take you

there.”• Search engines

– keywords and boolean logic– meta-search engines:

Google, Metacrawler, Dogpile– specific: EnergySearch

• Energy portals: EyeForEnergy, Energy Central

• Guru links:Utility Connection, EIA energy links

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Don’t forget to use the Pareto Rule:

20% of information sources provide 80% of what you need.

The trick is to identify those 20%, otherwise you may spend 80% of your time getting only 20% of what you need.

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http://www.analyticalQ.com/energy/information

• anne_ku@platts.com• tel: (020) 8545 6168

• Forthcoming article: Energy Information on the Web in January/February 2001 issue of Global Energy Business, to appear at http://www.platts.com/business