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A hybrid model for day-ahead electricity price forecasting: Combining fundamental and stochastic modelling

Mira Watermeyer, Thomas Möbius, Oliver Grothe, Felix Müsgens

arXiv 18 Apr 2023 · Econometrics · 1 citations (OpenAlex)

arXiv:2304.09336 · PDF · DOI · OpenAlex · Extracted main text

Abstract

The accurate prediction of short-term electricity prices is vital for effective trading strategies, power plant scheduling, profit maximisation and efficient system operation. However, uncertainties in supply and demand make such predictions challenging. We propose a hybrid model that combines a techno-economic energy system model with stochastic models to address this challenge. The techno-economic model in our hybrid approach provides a deep understanding of the market. It captures the underlying factors and their impacts on electricity prices, which is impossible with statistical models alone. The statistical models incorporate non-techno-economic aspects, such as the expectations and speculative behaviour of market participants, through the interpretation of prices. The hybrid model generates both conventional point predictions and probabilistic forecasts, providing a comprehensive understanding of the market landscape. Probabilistic forecasts are particularly valuable because they account for market uncertainty, facilitating informed decision-making and risk management. Our model delivers state-of-the-art results, helping market participants to make informed decisions and operate their systems more efficiently.

Citation extraction

110
references
174
in-text mentions
110
distinct cited
4
self-citations
17,623
main-text words

appendix boundary found by appendix_command · 98% of the source is main text. Read the extracted text to check this.

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
1Thomas Möbius, Mira Watermeyer, Oliver Grothe, and Felix Muesgens (2023) Enhancing Energy System Models Using Better Load Forecasts self1.00053100%
2Jesus Lago, Grzegorz Marcjasz, Bart De Schutter, and Rafał Weron (2021) Forecasting day-ahead electricity prices: A review of state-of-the-art algorithms, best practices and an open-access benchmark1.00053100%
3Florian Ziel and Rafał Weron (2017) Day-ahead electricity price forecasting with high-dimensional structures: Univariate vs. multivariate modeling frameworks0.92843100%
4Jakub Nowotarski and Rafał Weron (2017) Recent advances in electricity price forecasting: A review of probabilistic forecasting0.84333100%
5Tao Hong, Pierre Pinson, Yi Wang, Rafał Weron, Dazhi Yang, and Hamid… (2020) Energy Forecasting: A Review and Outlook0.73732100%
6Jakub Nowotarski and Rafał Weron (2015) Computing electricity spot price prediction intervals using quantile regression and forecast averaging0.73732100%
7Andreas Schröder, Friedrich Kunz, Jan Meiss, Roman Mendelevitch, and… (1861) Current and Prospective Costs of Electricity Generation until 20500.69391100%
8ENTSO-E Transparency Platform (2021) Actual Generation per Production Type, 2021c0.69361100%
9Open Power System Data (2020) Data Package National Generation Capacity. Version 2019-12-02., 2020b0.64441100%
10Tao Hong, Pierre Pinson, Shu Fan, Hamidreza Zareipour, Alberto Trocc… (2016) Probabilistic Global Energy Forecasting Competition 2014 and beyond0.64422100%

Showing the top 10 of 110 scored citations.