Electricity price predictability and quantifying customer suitability

Abstract

This report summarises progress made towards the problems submitted by Crystal Energy at the 82nd European Study Group with Industry. Crystal Energy purchases power from the Irish Single Electricity Market, and supplies it to small and medium sized business customers at half-hourly variable rates. They posed two problems to the study group. The first was to analyse the predictability of these electricity prices while for the second problem the group were asked to develop a metric that would help identify customers that are suitable for these flexible tariffs. The group’s analysis found that large price spikes and large errors between actual and predicted prices were more likely to occur at certain times. Previously, Crystal Energy supplied their customers with price predictions only. Using the results from the study group, Crystal Energy will now be able to provide their customers with information on the errors associated with price predictions as well as information on the likelihood of price spikes at a given time. In relation to the second problem, the group successfully developed a measure that is able to quantify the suitability of different customers to the flexible tariffs offered by Crystal Energy.