Development of a methodology for forecasting electricity-price series to improve demand response initiatives

Abstract

The main objective of electricity regulators when establishing electricity markets is to decrease the cost of electricity through competition. However, this scenario can not be achieved without the full participation of the electricity demand. The aim of this paper is to propose a procedure, through the detection of electricity-price patterns based on what happened in the energy markets the previous day, which could help customers and aggregators to take decisions in Electricity Markets. In this way, the capacity of a methodology (Statistical Ward's Linkage) to classify and forecast high electricity market prices is analyzed. Besides, some price-patterns were found in the abovementioned clusters. The knowledge contained within these patterns supplies customers with market-based information on which to focus its energy use decision to improve the usefulness of Demand Response Initiatives.