Principal component analysis of day‐ahead electricity price forecasting in CAISO and its implications for highly integrated renewable energy markets
Joseph Nyangon,
Ruth Akintunde
Abstract:Electricity price forecasting is crucial for grid management, renewable energy integration, power system planning, and price volatility management. However, poor accuracy due to complex generation mix data and heteroskedasticity poses a challenge for utilities and grid operators. This paper evaluates advanced analytics methods that utilize principal component analysis (PCA) to improve forecasting accuracy amidst heteroskedastic noise. Drawing on the experience of the California Independent System Operator (CAI… Show more
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