Electrical Energy Forecasting: Emerging Issues and a Case Study of Residential and General Service Loads in Newfoundland

Abstract

The study reviews the increasingly more difficult environment in which electricity demand forecasts must be prepared and concludes that forecasting models should be developed to explicity account for variations in a range of economic, energy, demographic, and energy policy factors.

Particular attention is given to the emerging issue of rate structure reform because of the implications that altered levels and patterns of electricity demand can have on systems expansion plans and hence costs. On this issue the study concludes that demand modelling methodologies must be developed to facilitate an analysis of consumer response to changes in rate design.

After reviewing selected econometric studies on electricity demand, separate electricity demand models were constructed for Newfoundland. The results indicate: (1) that prices and incomes in particular are important determinants of electricity demand but that the relative size of the elasticities depends on the market being analysed and whether one is examining demand responses in the short or longterm; and (2) that more extensive data is necessary to develop more reliable forecasting models to accomodate the range of future planning complexities.