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Know How Electricity Demand Forecasting Helpful for Us

Demand forecasting, which is power in the case of the electric industry, carries a great amount of importance for the whole industry. Electricity demand forecasting is essential because decisions regarding the operation and planning in the power system are based on it. Electrical companies use a wide variety of methods to predict electricity demand. It is apt for long-term, medium-term or short-term forecasting.

The change in the electrical demand might be due to complex interactions among various factors such as socio – economic, personal and combined factors.  Trailblazing and advanced methods are necessary in case of a dynamic environment instead of ordinary and normal forecasting techniques. The underlying causes can be determined by effectively resolving all the elements that might be the reason for a demand change. But sometimes, an inspection of various social and personal factors might result in huge complexity.

Forecasting and Scheduling, Day ahead Forecasting and Energy Demand Forecast comes under Electricity Demand Forecasting.


Electricity demand forecasting requires scrutinizing different variables such as:
  • Calendar data: Bank holidays, hour, season etc.
  • Weather data: Rainfall, humidity, temperature, etc.
  • Company data: Electricity price, marketing or promoting campaigns.
  • Social data: Political and economic factors experimented by a country.
  • Demand data: Historical dissipation of electricity.
Electricity demand forecasting is helpful to us in many ways such as:
  • Electricity demand forecasting is of great importance for the energy suppliers and people involved in electric energy transmission, generation, and distribution. Accurate and precise models for electricity demand forecasting are crucial for the planning and operation of a utility company. Based on the results of the forecast, utilities synchronize their resources to reach the demand using a cost-effective plan.
  • Electricity demand forecasting is important and of great help for a non-utility self-sustaining power producer. As the owner of a power plant, you can make greater profits by participating partially in the real-time electricity market. Your profit will be then dependent on real-time value and prices and there won’t be any guarantee of you being chosen as the producer of power. On the other hand, you can bid your capacity in the market and accept the price value that the market sets. In this case, you will be having a guarantee of getting paid but you can get higher profits from the former method. Demand forecasting is therefore essential to make money and earn greater profits.
  • Electricity demand forecasting and energy demand forecast are necessary to reach future requirements, eliminate extra cost, and come up with a potential input to decision making. The energy sector is indeed important and necessary and electricity and energy have become a life-sustaining element. The conventional energy resources are limited and scarce on earth and therefore, it is necessary to develop better methods to forecast future energy demand to have an adequate supply. This step will help the countries to formulate their development projects. It will help in avoiding over-planning.
A paramount part of the complete energy requirements of the society is constituted by electricity. In order to operate a power system one needs to match the demand for electric energy with the supply available then. Electricity demand forecasting is therefore helpful in proper planning and implementation of future resources. It is considered as one of the most vital factors for economic performance and operation in case of power systems. There is a dire need for demand forecasting for an electric utility. With the rise of the private sector and tariff reform, electricity demand forecasting is assumed to be of great importance.

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