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Skillful Seasonal Predictions of Boreal Winter Accumulated Heating Degree Days and Relevance for the Weather Derivative Market

Journal: Journal of Applied Meteorology and Climatology
Year: 2013   Volume: 52
Initial page: 1297   Last page: 1302
Status: Published
In this status since: 1 Jun 2013
PDF file: 2013_Brands_JAMC_HDD.pdf
DOI: 10.1175/JAMC-D-12-0303.1

It is demonstrated that boreal winter accumulated heating degree days, a weather derivative product frequently demanded by energy suppliers (among others), can be skillfully predicted with a lead time of one month, i.e. at the beginning of the previous November, for many regions of the Northern Hemisphere extratropcis. This finding contradicts the assumption of poor seasonal predictability for this variable. The present short note is meant to properly inform the participants of the weather derivative market in order to assure market transparency and to foster the scientific discussion on how to disseminate with this formerly unknown expert knowledge.