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Revisiting Day-ahead Electricity Price: Simple Model Save Millions

Linian Wang, Jianghong Liu, Huibin Zhang, Leye Wang

arXiv 20 May 2024 · Machine Learning

arXiv:2405.14893 · PDF · DOI · OpenAlex · Extracted main text

Abstract

Accurate day-ahead electricity price forecasting is essential for residential welfare, yet current methods often fall short in forecast accuracy. We observe that commonly used time series models struggle to utilize the prior correlation between price and demand-supply, which, we found, can contribute a lot to a reliable electricity price forecaster. Leveraging this prior, we propose a simple piecewise linear model that significantly enhances forecast accuracy by directly deriving prices from readily forecastable demand-supply values. Experiments in the day-ahead electricity markets of Shanxi province and ISO New England reveal that such forecasts could potentially save residents millions of dollars a year compared to existing methods. Our findings underscore the value of suitably integrating time series modeling with economic prior for enhanced electricity price forecasting accuracy.

Citation extraction

57
references
106
in-text mentions
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distinct cited
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self-citations
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main-text words

appendix boundary found by appendix_titled_section at “Appendix A” · 64% 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
1Nie, Y.; Nguyen, N. H.; Sinthong, P.; and Kalagnanam, J (2022) A time series is worth 64 words: Long-term forecasting with transformers0.92843100%
2Zeng, A.; Chen, M.; Zhang, L.; and Xu, Q (2023) Are Transformers Effective for Time Series Forecasting?0.8434475%
3Liu, Y.; Hu, T.; Zhang, H.; Wu, H.; Wang, S.; Ma, L.; and Long, M (2023) itransformer: Inverted transformers are effective for time series forecasting0.8434475%
4Zhang, Y.; and Yan, J (2023) Crossformer: Transformer utilizing cross-dimension dependency for multivariate time series forecasting0.84333100%
5Zheng, K.; Wen, B.; Wang, Y.; and Chen, Q (2020) Impact of electricity price forecasting errors on bidding: a price-taker's perspective0.84333100%
6Lago, J.; Marcjasz, G.; De Schutter, B.; and Weron, R (2021) Forecasting day-ahead electricity prices: A review of state-of-the-art algorithms, best practices and an open-access benchmark0.7374450%
7Liu, Y.; Li, C.; Wang, J.; and Long, M (2023) Koopa: Learning Non-stationary Time Series Dynamics with Koopman Predictors0.7373367%
8Ludwig, N.; Feuerriegel, S.; and Neumann, D (2015) Putting Big Data analytics to work: Feature selection for forecasting electricity prices using the LASSO and random forests0.7373367%
9Manfre Jaimes, D.; Zamudio López, M.; Zareipour, H.; and Quashie, M (2023) A Hybrid Model for Multi-Day-Ahead Electricity Price Forecasting considering Price Spikes0.7373367%
10Prahara, P. J.; and Hariadi, T. K (2022) Improved Feature Selection Algorithm of Electricity Price Forecasting using SVM0.7373367%

Showing the top 10 of 57 scored citations.