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Assuring explainability on demand response targeting via credit scoring

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  • Lee, Kyungeun
  • Lee, Hyesu
  • Lee, Hyoseop
  • Yoon, Yoonjin
  • Lee, Eunjung
  • Rhee, Wonjong

Abstract

As data-driven innovation becomes a main trend in the energy sector, explainability of data-driven actions is becoming a major fairness issue for the residential applications, and it is expected to become a requirement for regulatory compliance. Explainability, however, often demands a sacrifice in prediction performance and affects the effectiveness of data-driven actions. In this study, we consider data-driven customer targeting in an incentive-based residential demand response program, and investigate the explainability-performance tradeoff when using simple-rule based, machine learning, and credit scoring methods. Credit scoring, that has been a popular solution in the finance discipline for over 60 years, is a scorecard based modeling method that can surely provide explainability. We first provide the detailed steps of applying credit scoring to the demand response problem. Then, we use a dataset of 14,525 households obtained from a real demand response program and analyze two prediction problems – participation prediction and behavior change prediction. The results show that credit scoring can achieve a comparable performance as the best-performing machine learning methods while providing full explainability. Our results suggest that credit scoring can be a promising explainability option for broader energy sector problems.

Suggested Citation

  • Lee, Kyungeun & Lee, Hyesu & Lee, Hyoseop & Yoon, Yoonjin & Lee, Eunjung & Rhee, Wonjong, 2018. "Assuring explainability on demand response targeting via credit scoring," Energy, Elsevier, vol. 161(C), pages 670-679.
    • Handle: RePEc:eee:energy:v:161:y:2018:i:c:p:670-679
    DOI: 10.1016/j.energy.2018.07.179
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    1. Gao, Jianwei & Ma, Zeyang & Guo, Fengjia, 2019. "The influence of demand response on wind-integrated power system considering participation of the demand side," Energy, Elsevier, vol. 178(C), pages 723-738.
    2. Wang, Ziyang & Sun, Mei & Gao, Cuixia & Wang, Xin & Ampimah, Benjamin Chris, 2021. "A new interactive real-time pricing mechanism of demand response based on an evaluation model," Applied Energy, Elsevier, vol. 295(C).

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