Central America Data Solutions

1. Central America Data Solutions

2. Data solutions for risk management The complete package • Historical observations • 10 years + • No missing or erroneous observations (cleaned) • Discontinuities detected and corrected • Near real-time data updates (feeds) • Continuous stream of observations – no feed failures • No missing or erroneous observations (cleaned) • Settlement data • Reliability and accuracy is critical • Forecasts • Reliability and accuracy Without all 3 components in place the deal(s) may never get off the ground.

3. Data solutions for risk management As with any region of the world we begin by looking at the two most widely used types of data and then we will consider other options • Climate Data • Synoptic Data • Other Solutions

4. Data solutions for risk management As with any region of the world we begin by looking at the two most widely used types of data and then we will consider other options • Climate Data • Data is subject to the highest levels of quality control • Is the basis of the official records of historical weather and climate for a country (legal quality data) • Climate data typically is observed over a 24-hour period (true max / min) • Current standard for weather risk transactions • Often expensive and difficult to obtain • Synoptic Data • Other Solutions

5. Climate Station Locations Climate Data: Belize • Instituto Meteorológico Nacional (http://www.imn.ac.cr) • 34 Stations Currently Reporting (May 2007) • Limited real-time observations available on internet • Few Stations with more than 20 years history

6. 68 Stations Currently Reporting Climate Data: Costa Rica • Instituto Meteorológico Nacional (http://www.imn.ac.cr) • 68 Stations Currently Reporting (Feb 2007) • 13 automatic stations (real-time data available on the internet) • 28 precipitation only • 40 precipitation and temperature • 20+ years History

7. 42 stations available online Climate Data: El Salvador • Servicio Nacional de Estudios Territoriales (www.snet.gob.sv) • Center of Pronóstico Meteorológico (CPM) • Center of Información and Agrometeorología • Center of Predicción Climática (CPC) • 5 Synoptic stations • 27 Climate stations • 72 Precipitation Stations • 42 Stations available online • Displaying near-real time hourly observations • Temperature, wind, relative humidity, precipitation,… • Historical data available up to 80 years

8. 9 Synoptic stations Climate Data: Guatemala • Instituto Nacional de Sismologia, Vulcanología, Meteorología e Hidrologia (http://www.insivumeh.gob.gt/index.html) • 9 Synoptic stations • 65 Meteorological stations (13 Automatic stations) • 71 Hydrological stations (daily and hourly observations) • Historical data available for 48+ years (limited selection)

9. 14 Synoptic stations Climate Data: Honduras • Servicio Meteorológico Nacional – SNM (http://www.smn.gob.hn) • 14 Synoptic stations • 20 precipitation stations • Basic data feeds (14 Synoptic stations) available on internet • Historical data: many stations with 60+ years of data

10. Climate Data: Nicaragua • Nicaraguan institute of Territorial Studies (INETER) (http://www.ineter.gob.ni) • 20 primary weather stations • Substantial historical records (40+ years) • Climate summaries available online

11. 93 active weather stations Climate stations Climate Data: Panama • Hydrometeorology Management of Empresa de Transmisión Eléctrica S.A. (ETESA) (http://www.hidromet.com.pa) • 12 Climate stations (updates available online – broken link since Feb 2005) • 91 active weather stations

12. Climate Data: Summary • Facts • Each Meteorological Office has some digital archives of historical observations • Many countries are currently providing limited real-time observations on their web sites (no historical data archives available on the internet) • Reliable and accurate observations in a near-real time environment is available for a limited number of core stations • Feasibility / comments • Preliminary discussions with these Met Offices indicate that data can be made available for market use • We are not able to comment on the quality of the data, we are assuming moderate quality at best • Sourcing data will be somewhat time consuming (redistribution contracts) and costly • Cleaning techniques will play a major role in assuring the accuracy and completeness of time series • Settlement data (per the U.S. and Europe) will probably not be available • The complete package? • History • Feeds • Settlement = may be a problem

13. Data solutions for risk management As with any region of the world we begin by looking at the two most widely used types of data and then we will consider other options • Climate Data • Synoptic Data • Synoptic data is often observed over a 12-hour period (12-hour max / 12-hour min) • Undergoes minimal amount of quality control (erroneous observations problematic) • Exchanged among National Meteorological Services to produce forecasts (ECMWF, GFS,…) • Easier Access to Data / less expensive • Lack of settlement data in the traditional sense • Other Solutions

14. Synoptic Data: • Synoptic data in Central America is observed using the following convention (all times in UTC) • Minimum temperatured = 0000d to 1200d • Maximum temperatured = 1200d to 0000d+1 • Precipitationd = 1200d to 1200d+1 • Missing and erroneous observations are extremely problematic • Precipitation, sometimes missing is denoted by “0.0” • “good” stations the are ones missing less than 20% of observations (good climate stations are ones missing less than 5% of data) • Settlement data is non-existent in its traditional form (Met Office edited data)

15. 18 stations with reliable Synoptic feeds Synoptic Data: Feeds • GTS (Global Telecommunications System) transmitted Synoptic reports • An analysis of the past 3-months of archived reports finds that 18 stations have reliable data feeds (max, min, precipitation) • Summary: • Feeds are reasonable • Feeds are useless without historical data for pricing

16. Synoptic Data: Historical data availability • Archived Synoptic reports from the ISH (Integrated Surface Hourly dataset) / Global Summary of the Day database • Inventory (mid 1970s to present) • Total of 49 stations with historical data • Belize = 3 • Costa Rica = 6 • El Salvador = 5 • Guatemala = 8 • Honduras = 15 • Nicaragua = 7 • Panama = 5 • Maximum Temperature: 13/49 are missing more than 50% of all observations • Minimum Temperature: 13/49 are missing more than 50% of all observations • Precipitation: 18/49 are missing more than 50% of all observations

17. Synoptic Data: History & Feeds • History without feeds = useless • Feeds without history = useless • The COMPLETE PACKAGE is available for 18 locations Country Summary Belize = 1 Costa Rica = 0 El Salvador = 0 Guatemala = 5 Honduras = 9 Nicaragua = 0 Panama = 3

18. Synoptic Data: Summary • Facts • The GTS feeds appear to be reliable with reasonable amounts of missing data • The historical data is reasonable with stations missing on average 23% of observations • This solution is feasible for some countries and not others (Costa Rica, El Salvador, and Nicaragua have no data) • Feasibility / comments • The data cannot be cleaned – not enough surrounding stations for traditional methods • Without cleaning the risk exists for erroneous observations • There is no reliable source for settlement data • We would recommend using this data as-is only if desperate • The complete package? • History (potential problems) • Feeds (potential problems) • Settlement

19. Data solutions for risk management As with any region of the world we begin by looking at the two most widely used types of data and then we will consider other options • Climate Data • Synoptic Data • Other Solutions… • Private networks / system upgrades • Re-analysis data

20. Casella Instruments (AWS System) Other Solutions… • Private networks / upgrade existing systems • Install instrumentation – working with the Met Office or private companies to install observation systems for weather risk management purposes • Specific geographical placement • Known data quality / reliability • Certified data for settlement purposes • Reduced tampering risk • Generate synthetic history / clean existing archives • Use existing data from 2nd and 3rd tier climate networks • Proven ability to create representative observations • The complete package? • History • Feeds • Settlement • Re-analysis data • Historical data • Feeds / updates

21. Review / comments • Climate data • Best historical data solution (after cleaning), feeds questionable, settlement data problematic • Difficulty sourcing data / cost • Synoptic data • Easiest solution for ‘reliable’ feeds, historical data ok at best, settlement data non existent • To be used as a last resort • Private networks / upgrade existing systems • Best solution for settlement data and feeds • Costly and time consuming • Synthetic historical data not preferable

22. Recommendations • Scenario #1 (one-off trade, small transaction, limited data budget) • Consider initial pricing using historical synoptic data or climate data • Focus on stations that already report via Synoptic or web site • Carefully word contracts with regards to settlement • Scenario #2 (one-off trade, large transaction, moderate budget) • Focus on stations with archives of climate observations (source data and CLEAN data) • Focus on stations that already report via Synoptic or web site • Employ an independent 3rd party for certification of data for settlement • Scenario #3 (strategic business direction, multiple transactions, large budget) • Select regions of interest, review climate data availability (sourced data, CLEAN data, synthesize data) • Work with Met Office to upgrade existing hardware and communication systems (install stations) • Employ an independent 3rd party for certification of data for settlement