A literature review with statistical analysis of electricity price forecasting methods

Abstract

In today's liberalized and competitive power market, electric utilities, power producers and traders are exposed to increasing price risks and volatility. The growing reliance on renewable sources and their dependence on weather, nuclear uncertainty, market coupling and global financial instability are contributing to importance of accurate price forecast. Considering the fact that power markets are not equally developed, different price forecasting methods have arose. This paper provides an overview of notable price forecasting methods that have been published in research papers. The paper also includes statistical review of applied methods embracing timeframe, geographical background, statistical errors and other specific data. Finally, results are discussed with respect to qualitative and quantitative statistical analysis, with emphasis on the price forecasting accuracy.