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Long term load forecasting accuracy in electric utility integrated resource planning

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  • Carvallo, Juan Pablo
  • Larsen, Peter H.
  • Sanstad, Alan H.
  • Goldman, Charles A.

Abstract

Forecasts of electricity consumption and peak demand over time horizons of one or two decades are a key element in electric utilities’ meeting their core objective and obligation to ensure reliable and affordable electricity supplies for their customers while complying with a range of energy and environmental regulations and policies. These forecasts are an important input to integrated resource planning (IRP) processes involving utilities, regulators, and other stake-holders. Despite their importance, however, there has been little analysis of long term utility load forecasting accuracy. We conduct a retrospective analysis of long term load forecasts on twelve Western U. S. electric utilities in the mid-2000s to find that most overestimated both energy consumption and peak demand growth. A key reason for this was the use of assumptions that led to an overestimation of economic growth. We find that the complexity of forecast methods and the accuracy of these forecasts are mildly correlated. In addition, sensitivity and risk analysis of load growth and its implications for capacity expansion were not well integrated with subsequent implementation. We review changes in the utilities load forecasting methods over the subsequent decade, and discuss the policy implications of long term load forecast inaccuracy and its underlying causes.

Suggested Citation

  • Carvallo, Juan Pablo & Larsen, Peter H. & Sanstad, Alan H. & Goldman, Charles A., 2018. "Long term load forecasting accuracy in electric utility integrated resource planning," Energy Policy, Elsevier, vol. 119(C), pages 410-422.
    • Handle: RePEc:eee:enepol:v:119:y:2018:i:c:p:410-422
    DOI: 10.1016/j.enpol.2018.04.060
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    Cited by:

    1. González Grandón, T. & Schwenzer, J. & Steens, T. & Breuing, J., 2024. "Electricity demand forecasting with hybrid classical statistical and machine learning algorithms: Case study of Ukraine," Applied Energy, Elsevier, vol. 355(C).
    2. Zhao, Zhenyu & Zhang, Yao & Yang, Yujia & Yuan, Shuguang, 2022. "Load forecasting via Grey Model-Least Squares Support Vector Machine model and spatial-temporal distribution of electric consumption intensity," Energy, Elsevier, vol. 255(C).
    3. Hafeez, Ghulam & Alimgeer, Khurram Saleem & Khan, Imran, 2020. "Electric load forecasting based on deep learning and optimized by heuristic algorithm in smart grid," Applied Energy, Elsevier, vol. 269(C).
    4. Erik Heilmann & Janosch Henze & Heike Wetzel, 2021. "Machine learning in energy forecasts with an application to high frequency electricity consumption data," MAGKS Papers on Economics 202135, Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung).
    5. Lee, Juyong & Cho, Youngsang, 2022. "National-scale electricity peak load forecasting: Traditional, machine learning, or hybrid model?," Energy, Elsevier, vol. 239(PD).
    6. Ijaz Ul Haq & Amin Ullah & Samee Ullah Khan & Noman Khan & Mi Young Lee & Seungmin Rho & Sung Wook Baik, 2021. "Sequential Learning-Based Energy Consumption Prediction Model for Residential and Commercial Sectors," Mathematics, MDPI, vol. 9(6), pages 1-17, March.
    7. Rodríguez, Fermín & Martín, Fernando & Fontán, Luis & Galarza, Ainhoa, 2021. "Ensemble of machine learning and spatiotemporal parameters to forecast very short-term solar irradiation to compute photovoltaic generators’ output power," Energy, Elsevier, vol. 229(C).
    8. Mohammad Dehghani & Mohammad Mardaneh & Om P. Malik & Josep M. Guerrero & Carlos Sotelo & David Sotelo & Morteza Nazari-Heris & Kamal Al-Haddad & Ricardo A. Ramirez-Mendoza, 2020. "Genetic Algorithm for Energy Commitment in a Power System Supplied by Multiple Energy Carriers," Sustainability, MDPI, vol. 12(23), pages 1-23, December.
    9. Fermín Rodríguez & Fernando Martín & Luis Fontán & Ainhoa Galarza, 2020. "Very Short-Term Load Forecaster Based on a Neural Network Technique for Smart Grid Control," Energies, MDPI, vol. 13(19), pages 1-19, October.
    10. Carvallo, Juan Pablo & Sanstad, Alan H. & Larsen, Peter H., 2019. "Exploring the relationship between planning and procurement in western U.S. electric utilities," Energy, Elsevier, vol. 183(C), pages 4-15.
    11. Xin Gao & Xiaobing Li & Bing Zhao & Weijia Ji & Xiao Jing & Yang He, 2019. "Short-Term Electricity Load Forecasting Model Based on EMD-GRU with Feature Selection," Energies, MDPI, vol. 12(6), pages 1-18, March.
    12. Roman V. Klyuev & Irbek D. Morgoev & Angelika D. Morgoeva & Oksana A. Gavrina & Nikita V. Martyushev & Egor A. Efremenkov & Qi Mengxu, 2022. "Methods of Forecasting Electric Energy Consumption: A Literature Review," Energies, MDPI, vol. 15(23), pages 1-33, November.
    13. Donk, Peter & Sterl, Sebastian & Thiery, Wim & Willems, Patrick, 2023. "Climate-combined energy modelling approach for power system planning towards optimized integration of renewables under potential climate change - The Small Island Developing State perspective," Energy Policy, Elsevier, vol. 177(C).
    14. Thangjam, Aditya & Jaipuria, Sanjita & Dadabada, Pradeep Kumar, 2023. "Time-Varying approaches for Long-Term Electric Load Forecasting under economic shocks," Applied Energy, Elsevier, vol. 333(C).
    15. Paul Anton Verwiebe & Stephan Seim & Simon Burges & Lennart Schulz & Joachim Müller-Kirchenbauer, 2021. "Modeling Energy Demand—A Systematic Literature Review," Energies, MDPI, vol. 14(23), pages 1-58, November.
    16. Hamidreza Mirtaheri & Piero Macaluso & Maurizio Fantino & Marily Efstratiadi & Sotiris Tsakanikas & Panagiotis Papadopoulos & Andrea Mazza, 2021. "Hybrid Forecast and Control Chain for Operation of Flexibility Assets in Micro-Grids," Energies, MDPI, vol. 14(21), pages 1-22, November.
    17. Wang, Yongli & Wang, Shuo & Song, Fuhao & Yang, Jiale & Zhu, Jinrong & Zhang, Fuwei, 2020. "Study on the forecast model of electricity substitution potential in Beijing-Tianjin-Hebei region considering the impact of electricity substitution policies," Energy Policy, Elsevier, vol. 144(C).
    18. Bibi Ibrahim & Luis Rabelo, 2021. "A Deep Learning Approach for Peak Load Forecasting: A Case Study on Panama," Energies, MDPI, vol. 14(11), pages 1-26, May.
    19. Li, Jinghua & Luo, Yichen & Wei, Shanyang, 2022. "Long-term electricity consumption forecasting method based on system dynamics under the carbon-neutral target," Energy, Elsevier, vol. 244(PA).

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