11th Young Energy Economists & Engineers Seminar - YEEES Madrid 2011, Madrid (Spain). 24-25 noviembre 2011
Summary:
The aim of this paper is to identify the distinguishing factors characterizing the occurrence of abnormal low electricity prices in the Spanish wholesale market. A first empirical analysis shows that this situation is caused by the collapse in system demand and the massive influx of renewable energy. However, this situation is more complex than it may appear and must be analyzed more deeply. This paper proposes a novel methodology to identify the appearance of these hours through decision trees and logistic regression technique. We give a comprehensive theoretical proof of the proposed methodology, which empirically demonstrates its effectiveness by achieving promising experiment results on real market price dataset. Both techniques are compared in terms of the results obtained. Examination of the models goodness of fit is done by means of statistical and graphical tools. This theory to predict abnormal low prices can provide valuable information for companies when facing their decision making and risk-management process.
Keywords: Spanish electricity prices, abnormal low prices, logistic regression, decision trees
Publication date: November 2011.
Citation:
Bello, A., Reneses, J., Barquín, J., Forecasting of abnormal low prices in the Spanish electricity market, 11th Young Energy Economists & Engineers Seminar - YEEES Madrid 2011, Madrid (Spain). 24-25 November 2011.
IIT-11-197A
