Potential climate predictability of renewable energy supply and demand for Texas given the ENSO hidden state

Abstract

Climate variability influences renewable electricity supply and demand and hence system reliability. Using the hidden states of the sea surface temperature of tropical Pacific Ocean that reflect El Niño–Southern Oscillation (ENSO) dynamics that is objectively identified by a nonhomogeneous hidden Markov model, we provide a first example of the potential predictability of monthly wind and solar energy and heating and cooling energy demand for 1 to 6 months ahead for Texas, United States, a region that has a high penetration of renewable electricity and is susceptible to disruption by climate-driven supply-demand imbalances. We find a statistically significant potential for oversupply or undersupply of energy and anomalous heating/cooling demand depending on the ENSO state and the calendar month. Implications for financial securitization and the potential application of forecasts are discussed.