PRobabilistic mid- and long-term prIce fORecasting In electriciTY markets (PRIORITY)

We are very pleased that the German Research Foundation (DFG) has approved the project PRobabilistic mid- and long-term prIce fORecasting In electriciTY markets (PRIORITY). The project is scheduled to start in the summer term of 2023. The project duration is 36 months.

Climate change is urging fundamental transformations in almost all sectors of the economy. To reach the EU target of climate neutrality by 2050, the electricity system needs huge investments in new storage capacities, renewable energy generation, demand response systems and transmission grid infrastructure. However, such investments require a rigorous (in statistical terms: reliable and sharp) quantification of the uncertain future, especially of electricity prices for horizons ranging from months to years.

Due to sector coupling, e.g., via electric vehicles and power-to-heat systems, the role of mid- and long-term probabilistic – or distributional – electricity price forecasting (EPF) will become even more important in the coming decades.

Yet, the relevant literature is very scarce. Only 8% of EPF studies concern horizons beyond the day-ahead and less than 1% provide the so much needed mid and long-term distributional forecasts.

More information on the Project can be found here.