Weather can have a profound effect on energy consumption, especially extremes of hot and cold temperatures. These variations, in particular, drive residential and commercial energy demand because space heating and cooling is such an important component. Traditional approaches are customized to the specific geography of interest. Energy regulators use a measure of divergence from normal temperatures to estimate peaks in demand when planning future capacity, or to strip out short-term weather effects to identify underlying growth trends. Energy traders marry weather forecasts to demand data to identify potential price peaks and troughs. What unites these analyses is that they tend to be either local or short term in nature; or both. However, the customization of methodology to a particular geography renders comparisons of the effects of weather between countries invalid. Targets for improving energy productivity and benchmarking of performance towards meeting such targets between countries requires a consistent global database, both spatially and temporally. To date, no such database has been available to policymakers.

KAPSARC has worked with the Euro-Mediterranean Center for Climate Change (CMCC) to create a database covering 147 countries over a period of several decades, based on consistent methodologies such that the impacts of local climate on energy consumption can be analyzed. Differences in the energy productivity of countries are comprised of several factors. These include the industrial structure of the economy, efficiency of equipment and processes, availability of water, and differences in weather, among other factors. Differentiating between the factors that are controllable (including economic structure and efficiency) and uncontrollable (including weather and access to water), allows policy to be focused in the areas where it can achieve the most beneficial impact. The CMCC-KAPSARC Weather Normalization Database is one of the tools now available to policymakers to separate the signal from the noise in guiding policies aimed at improving the energy productivity of their economies.