Combination of forecasts in electricity demand prediction

Accurate demand prediction is of great importance in the electricity supply industry. Electricity cannot be stored, and generating plant must be scheduled well in advance to meet future demand. Up to now, where online information about external conditions is unavailable, time series methods on the historical demand series have been used for short-term demand prediction. These have drawbacks, both in their sensitivity to changing weather conditions and in their poor modelling of the daily/weekly business cycles. To overcome these problems a framework has been constructed whereby forecasts from different prediction methods and different forecasting origins can be selected and combined, solely on the basis of recent forecasting performance with no a priori assumptions of demand behaviour. This added flexibility in univariate forecasting provides a significant improvement in prediction accuracy.