Electric load forecasting: fundamentals and best practices

Over the past few years, we have found that most books and papers in the load forecasting literature are too theoretical with little practical value. The utility analysts can hardly find a readable document explaining why utilities are developing and using the forecasts the way they do today and how to improve the existing forecasting practices. The graduate students too often have to pick up a few high quality load forecasting papers buried by thousands of others that have not been and will never be used in practice. Therefore, we have decided to write a book on load forecasting to offer the current and future utility load forecasting analysts a comprehensive, useful and up-to-date reference for today's competitive and dynamic environment.

Electric Load Forecasting: Fundamentals and Best Practices is based on over 40 years of research, teaching and consulting experience on time series forecasting and electric load forecasting with thousands of students and utility professionals. Comparing with other reference books and textbooks on the market, this book is different in the following aspects:

  • State-of-the-art and field-tested methodology. Although the utility industry has been dealing with forecasting problems for over a century, many utilities are still using the methodologies developed several decades ago. This book documents the state-of-the-art load forecasting methodologies developed from our research efforts. Moreover, all of these methodologies have been testified through many field implementation projects. Most of them have been commercialized and deployed to many utilities worldwide.

  • Real-world data and case studies. We have performed extensive consulting and education practices for over a hundred organizations across virtually all segments of the utility industry. With the permissions from some of our clients and access to some public information, we are able to develop all of the examples in this book based on real-world data and case studies.

  • Solid fundamentals and development of intuition. Through our teaching experience to thousands of students and utility professionals, we have found that many people miss some fundamentals in their knowledge base, which prevents them from having a good intuition to conduct the next-step analysis. In this book, we put a great emphasis on the fundamental tools, such as graphical methods and regressions analysis. Through iterations of forecast improvement using fundamental tools, we hope to help the readers develop intuitions to conduct their forecasting jobs.

We organize the contents into five parts:

  • Part I Fundamentals covers essential background required to perform a load forecasting job. This includes the business background of the industry (Chapter 1), data analysis (Chapter 2), regression analysis (Chapter 3) and model selection methodology (Chapter 4).

  • Part II Integrated Load Forecasting proposes a methodology that connects various load forecasting jobs together, from short term load forecasting (Chapter 5) to very short term load forecasting (Chapter 6) and medium/long term load forecasting (Chapter 7).

  • Part III Advanced Topics discusses how to further improve the forecasting accuracy by combining forecasts from multiple techniques (Chapter 8), utilizing high granular information (Chapter 9) and detecting outliers and cleansing the data (Chapter 10).

  • Part IV Applications extends the load forecasting methodologies and techniques to three other important utility applications including load settlement (Chapter 11), demand response forecasting (Chapter 12) and retail energy forecasting (Chapter 13).

  • Part V Conclusion discusses many frequently made mistakes (Chapter 14) and the artistic aspect of load forecasting (Chapter 15).

This book can be used in the three ways:

  • A primary reference book for the current and future utility load forecasting analysts. This book does not require readers to have prior knowledge in the theoretical or practical aspects of electric load forecasting. The readers with some experience in either or both can pick up the materials with different emphasis. For instance, a statistics majored graduate can focus on the practical examples and case studies. An experienced utility analyst, who has been dealing with many practical issues related to load forecasting through empirical approaches, can focus on building up a solid statistical background to further enhance the existing forecasting process.

  • A textbook for the graduate course or industry training on electric load forecasting. For a one-semester course, the instructor can cover one chapter per week. A two-day industry training course can be constructed using materials from Parts I, II and V.

  • A reference book for graduate courses where load forecasting is covered as a special topic or used as examples to illustrate applications of some techniques. These courses include energy systems planning, energy markets, energy economics, regression analysis, time series analysis and data mining.

We will continuously update this book with the feedback gathered from the readers. Please enjoy reading this book as each chapter becomes available. If you have any suggestions, please leave them in the comment field of the book page. If you are interested in getting updates about energy forecasting activities, articles, tips and job openings, you are welcome to subscribe the email distribution list.

Tao Hong and David A. Dickey
September 2013.