Cooling degree day (CDD),

Definition of Cooling degree day (CDD):

1. A cooling degree day (CDD) is a measurement designed to quantify the demand for energy needed to cool buildings. It is the number of degrees that a day's average temperature is above 65o Fahrenheit (18o Celsius). Studies have shown that when the outside temperature reaches that level, people inside no longer want the building heated, but instead begin to consider cooling the building.

2. See degree day.

3. This measure has relevance to the price of weather derivatives traded on the basis of an index made up of monthly CDD values. The settlement price for a weather futures contract is calculated by summing CDD values for a month and multiplying that sum by $20.

How to use Cooling degree day (CDD) in a sentence?

1. Cooling Degree Day is a measure that helps to simplify the cost of projected energy consumption.
2. It is based on the number of days where the temperature is above 65 degrees Fahrenheit, and the number of degrees above 65.
3. Taking an average of the number of degrees and days above 65 helps organizations that have a need to hedge against energy costs.