European weather data pricing: Private sector view Dr. Pirkko Saarikivi, Managing Director Foreca Consulting Ltd PSI Pricing thematic meeting Helsinki, Finland 19th April, 2007

Who needs weather services? Beneficial for the whole society: increases security and well-being, industry needs info for decision-making Average cost/benefit factor from 1/5, up to 1/100 Benefits in Europe at least 10 billion Euros annually Most important user groups: all modes of transport, media (TV, radio, newspapers, Internet, mobile), agriculture, power industry, construction, retail, sports Meteorologists are the few people who actually do know something valuable about the future

How to do it? Long service chain starts from global 24/7 observing system Analysis and climate databases Global long-range models run in supercomputer centres Local models and forecasters for fine-scale products Delivery automatically to customers (e.g. ftp, Internet)

Weather observations 24/7 Most data comes from public observing systems run by National Meteorological Services (NMSs) Dedicated global telecom network GTS Coordinated by United Nations / World Meteorological Organization Other data sources e.g. from aviation and road authorities Continuous 24/7 data flow and large climate data archives

SYNOP surface observations

TEMP radiosonde soundings

Buoy observations to fill the gaps on oceans

Geostationary and polar orbiting satellites

Aircraft observations

Weather radars and lightning detectors

Many kinds of atmospheric models producing weather parameters, km resolution, local to global, hourly to seasonal

Weather data pricing rules Competition Law must be followed in EU, thus ECOMET E.E.I.G. created for the pricing and delivery of weather data by European NMSs Currently weather data priced on a unit by unit basis for real time synoptic data, climatological data, models, radar images, lightning detection and some satellite imagery Price varies country to country, and also by type of customer (end user, broadcaster, service provider excluding or including redistribution licence) Other data sources: In Finland road weather data is fine, business separated to a company and data is freely available with a permission. In Sweden not.

Weather data pricing rules cont. Small part of global data is free of charge for security reasons, European data has very high basic price. Volume discounts and further discounts for small service providers available, but only for a part of data (ECMWF model and EUMETSAT data charged on top using their own pricing rules) In addition to data price, delivery or transmission costs and internet broadcast fees charged Thus ECOMET pricing structure overly complicated, inconsistent between countries, prohibitively expensive and discriminatory Some examples of complicated ECOMET prices:

Pricing of surface observations

Pricing of radar observations = Gross cost 11 Me per annum

Pricing of climate data Archived climate data is priced by each weather parameter (in Finland 0,16 € for service provider) Accumulated data volumes very large, millions of parameters per year Thus total price of European climate data is enormous (several hundreds of Euros, impossible to calculate) Some NMSs very reluctant to sell climate data (or any other data) Climate change has had no effect to these restrictive policies

Global weather markets Weather business in Finland, EU, Japan and USA. Light blue: total annual business in late 90’s, Red: five year potential relative to market size

Global weather markets European private weather business small and weak SMEs with small turnover ( 1Me At least 300 Me business missing, society losing some 3000 Me in direct and indirect benefits and about 2000 new jobs not created Governments are losing annually at least 150 Me in returning taxes Meanwhile only 0,5-1 Me returned to Ecomet from data sales

Key problems in today’s Europe EU weather market weak, non-competitive, restricted data policy vs. US and Japan open policy and strong market Data prices very high, not reasonable for business. Only fraction of data is affordable to companies Heavy barriers for entry to the market Public subsidies and predatory pricing still common Public and business activities mixed inside governmental institutes, no separation, no transparency in accounting

Key problems in today’s Europe Some business areas still governmental monopoly (e.g. aviation) NMSs sharing regionally the market, very little real competition No real competition on data sales either, private company has only one real alternative (national) New data directives (environmental, PSI, Inspire) have had no effect. Heavy lobbying to water them down Result: innovation potential and creation of new services will be in trouble in the EU

Key solutions for tomorrow’s Europe Most important: all weather business must be separated, legally and physically from institutes to real business companies Weather information gradually openly and unrestrictedly available as in the USA Before that we need more reasonable pricing rules Delivery efficient, on-line. We need a centralized organization and public data server for environmental data as in the USA

Key solutions for tomorrow’s Europe New carrot to NMSs: success measured by the increased weather business sector, quality of providing and quantity of use of basic weather information Secured financing from the state for public needs Private companies join decision making and quality control New data policy rules must come top-down from the governments and ministries to avoid personal conflicts of interest

PRIMET for private weather data policy PRIMET Association (formerly AEDUE) of 32 weather and environmental companies acting for open environmental data policy in Europe General secretary since : Richard Pettifer

Forecast for EU weather services? Some positive development is going on, especially in the Netherlands, the UK, Norway and Spain Some negative development recently on internet and broadcasting rules Inertia in the governmental organisations very strong EU global competitiveness getting even worse if politicians do not take action Long-term forecast thus: we need a good data policy storm first to get the sun eventually shining

Contact for more information Foreca Consulting Ltd Helsinki, Finland tel , fax