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The value of forecasts: Quantifying the economic gains of accurate quarter-hourly electricity price forecasts

Christopher Kath, Florian Ziel

arXiv 21 Nov 2018 · Finance — Statistical Finance · publishedEnergy Economics (2018) · 76 citations (OpenAlex)

arXiv:1811.08604 · PDF · DOI · OpenAlex · Extracted main text

Abstract

We propose a multivariate elastic net regression forecast model for German quarter-hourly electricity spot markets. While the literature is diverse on day-ahead prediction approaches, both the intraday continuous and intraday call-auction prices have not been studied intensively with a clear focus on predictive power. Besides electricity price forecasting, we check for the impact of early day-ahead (DA) EXAA prices on intraday forecasts. Another novelty of this paper is the complementary discussion of economic benefits. A precise estimation is worthless if it cannot be utilized. We elaborate possible trading decisions based upon our forecasting scheme and analyze their monetary effects. We find that even simple electricity trading strategies can lead to substantial economic impact if combined with a decent forecasting technique.

Citation extraction

39
references
48
in-text mentions
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distinct cited
3
self-citations
12,705
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Most heavily cited references

The works this paper leans on most, across its whole bibliography — not restricted to papers in our corpus. Ranked by composite intensity, which combines how often a work is mentioned, how many sections mention it, and how much of that falls in the main text rather than the appendix.

ReferenceIntensityMentionsSectionsMain text
1Uniejewski, B., Weron, R., & Ziel, F (2018) Variance stabilizing transformations for electricity spot price forecasting self0.64441100%
2Kiesel, R., & Paraschiv, F (2017) Econometric analysis of 15-minute intraday electricity prices0.64422100%
3Märkle-Hu, J., Feuerriegel, S., & Neumann, D (2018) Contract durations in the electricity market: Causal impact of 15min trading on the epex spot market0.64422100%
4Ziel, F., Steinert, R., & Husmann, S (2015) Forecasting day ahead electricity spot prices: The impact of the exaa to other european electricity markets self0.64422100%
5Calvo-Silvosa, A., Antelo, S. I., Soares, I. et al (2017) Energy planning and modern portfolio theory: A review0.58531100%
6Ziel, F (2017) Modeling the impact of wind and solar power forecasting errors on intraday electricity prices self0.51121100%
7Ad, R., Gruet, P., & Pham, H (2016) An optimal trading problem in intraday electricity markets0.40511100%
8Bordignon, S., Bunn, D. W., Lisi, F., & Nan, F (2013) Combining day-ahead forecasts for british electricity prices0.40511100%
9Buuren, S., & Groothuis-Oudshoorn, K (2011) mice: Multivariate imputation by chained equations in R0.40511100%
10Diebold, F. X., & Mariano, R. S (1995) Comparing predictive accuracy0.40511100%

Showing the top 10 of 39 scored citations.

Cited by, within the corpus

arXiv econ.EM papers that cite this one, ranked by how heavily they lean on it.

Citing paperIntensityMentionsSections
1Extrapolating the long-term seasonal component of electricity prices for forecasting in the day-ahead market0.64422
2Ranking probabilistic forecasting models with different loss functions0.40511