Modelling the Load Curve of Aggregate Electricity Consumption Using Principal Components

42 Pages Posted: 6 Dec 2003

See all articles by Matteo Manera

Matteo Manera

University of Milan-Bicocca, Italy - Department of Economics, Management and Statistics (DEMS); Fondazione Eni Enrico Mattei (FEEM), Milan, Italy

Angelo Marzullo

Eni S.p.A - Enifin

Date Written: October 2003

Abstract

Since oil is a non-renewable resource with a high environmental impact, and its most common use is to produce combustibles for electricity, reliable methods for modelling electricity consumption can contribute to a more rational employment of this hydrocarbon fuel. In this paper we apply the Principal Components (PC) method to modelling the load curves of Italy, France and Greece on hourly data of aggregate electricity consumption. The empirical results obtained with the PC approach are compared with those produced by the Fourier and constrained smoothing spline estimators. The PC method represents a much simpler and attractive alternative to modelling electricity consumption since it is extremely easy to compute, it significantly reduces the number of variables to be considered, and generally increases the accuracy of electricity consumption forecasts. As an additional advantage, the PC method is able to accommodate relevant exogenous variables such as daily temperature and environmental factors, and it is extremely versatile in computing out-of-sample forecasts.

Keywords: Electricity, Load curves, Principal components, Fourier estimator, Constrained smoothing estimator, Temperature, Non-renewable resources, Hydrocarbon fuels, Environment

JEL Classification: C51, C53, Q30, Q40

Suggested Citation

Manera, Matteo and Marzullo, Angelo, Modelling the Load Curve of Aggregate Electricity Consumption Using Principal Components (October 2003). FEEM Working Paper No. 95.2003. Available at SSRN: https://ssrn.com/abstract=467260 or http://dx.doi.org/10.2139/ssrn.467260

Matteo Manera (Contact Author)

University of Milan-Bicocca, Italy - Department of Economics, Management and Statistics (DEMS) ( email )

Via Bicocca degli Arcimboldi, 8
Milan, 20126
Italy
+39 02 6448 5819 (Phone)
+39 02 6448 5878 (Fax)

HOME PAGE: http://www.matteomanera.it

Fondazione Eni Enrico Mattei (FEEM), Milan, Italy ( email )

Corso Magenta, 63
Milan, 20123
Italy
+39 02 520 36944 (Phone)

HOME PAGE: http://www.feem.it

Angelo Marzullo

Eni S.p.A - Enifin

Piazzale Enrico Mattei, 1
I-00144 Milano
Italy

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