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Forecasts in practice and research: Evaluation and further development of methods for fundamentals and price forecasts of renewable energy

Reliable models and forecasts for electricity load, electricity infeed and electricity prices are essential for trading energy from fluctuating sources such as wind and solar. In conjunction with the energy turnaround, new challenges for market players arise as well as new markets due to new demands: Market players such as energy producers or energy traders can buy accurate forecasts from the market. Service providers in the forecasting market provide highly accurate point forecasts. However, their methodology of forecasting is usually unknown, as it is an industry secret. On the other side, there is the enormously broad, public-academic forecasting research branch, whose methodology contributions are oftentimes hard to implement in practice. As of how far the methodology of the service providers and that in the public field of research is similar or whether the applied forecasting approach is totally different from current research ideas, is unknown. Therefore, in a first step, a basis for the comparison of fundamental forecasts from a service provider and the state-of-the-art in research will be established to measure and compare the respective methods‘ performances. In the next step, the interdependency of fundamental forecasts and price formation will be analyzed. Here, a detailed analysis of whether the application of probabilistic forecasts instead of point forecasts is able to improve the forecast quality, will be performed. This improved quality may lead to more efficient markets and improved network stability, especially in times of increasing amounts of wind and solar power production. Finally, a comparison of the quality of previous electricity price forecasts of the co-applicant on the one hand and from the models that are state-of-the-art in current research on the other hand, especially those from recent probabilistic forecasting methods, will be carried out. Summing up, this project will be the basis for an exchange of expertise between academic and intra-company research, which scarcely takes place in public and from which both sides will benefit.

Research assistant: Dr. Carsten Croonenbroeck