LMP Forecasting - Methods and Applications

December 14-15, 2023 | Online :: Central Time

1223-lmp-forecasting

“This course is exactly what I was looking for to better understand price formation and dispatch in the electricity market.  The speaker is the only industry expert who addresses this topic in such complete detail.”  Associate, EDF Renewables

“Great way to learn how LMPs are calculated.” Rates and Policy Director, Northwest Requirements Utilities

“Presentation highly organized.  Speaker extremely knowledgeable and very clear in his explanations.  Very extensive research conducted in preparation for presentation.”  Senior System Metering Engineer, TriState G&T

“This course provided the insights into price formations that has taken my understanding to the next level.”  Market Operations Engineer, ERCOT

This course examines several approaches to predicting electricity prices for multiple purposes over different time horizons.  It begins with an overview of the characteristics of electricity prices and later provides the physical and mathematical background to explain the reasons for those characteristics.   Both fundamentals-based and time series-based approaches will be described in practical terms.  Forecasting approaches will be recommended based on the end use, time horizon and which data are (un)available, but all approaches offer the potential to forecast prices at multiple locations of interest at the same time.  Distinctions will be made between when high accuracy (for both timing and magnitude) forecasts are required by some use cases and when they are not required.  Specific real-world uses cases will be explored, using real-world data.

The content will also provide many insights into the quantities to be forecast and, from there, cover guidance about forecasting prices – with or without sophisticated modeling tools.  Emphasis will be placed on forecasting prices in U.S. locational marginal pricing (LMP) style markets.   A survey of forecasting approaches will be presented, examining their applicability to specific forecasting time horizons.  And, for those who are not professional forecasters, a discussion of “Do It Yourself” forecasting will round out the course.

Learning Outcomes

Using real-world situations and illustrative examples, this instructional course will:

• Review the characteristics of Locational Marginal Prices
• Discuss the value of forecast accuracy in multiple use cases
• Explain the underlying structure that determines electricity prices
• Illustrate locational marginal price (LMP) formation
• Address real-world applications, questions and solutions
• Review four time horizons and the appropriate price forecasting approaches for each
• Demonstrate what can be done with and without sophisticated modeling tools

Thursday, December 14, 2023 : Central Time

 

9:00 – 9:15 a.m. :: Overview and Introductions

9:15 – 10:30 a.m. :: Characteristics Of Wholesale Electricity Prices

• Nodal and Zonal locations
• Day-Ahead and Real-Time LMPs (1-hour and 5-minute intervals)
• Periodicity and Seasonality
• Typical distributions
• Trends, Correlations and Averages
• Discontinuities (regime shifts over time)
• Spikes (positive and negative)
• Negative prices
• Predictability over different time horizons
• Prediction accuracy required for various applications
  • Resource siting decision (which market, state and substation)
  • Resource investment and retirement decisions
  • Generation bidding (gas nomination, water release, etc.)
  • Transmission expansion plans
  • Generation investment and retirement decisions
  • PPA negotiation (CfD, basis, curtailment, negative LMP risks)
  • Trading (physical, virtual, speculative)
  • Financial transmission rights (FTR /TCR /TCC /CRR)
  • Regulatory and legislative (market reform debate)
  • Mark-to-Model

10:30 – 10:45 a.m. :: Morning Break

10:45 – 11:20 a.m. :: Two Categories of Price Forecasting Models

• Fundamentals-based
  • Economic dispatch and constrained power flow
  • Transmission network model needed
  • Individual generator economics and location
  • Consumer location in the network
• Data-driven
  • Time series, regression, ARIMA, ANN
  • Machine learning
  • Physics-informed models
• Addressing uncertainty of forecast inputs

11:20 – 11:45 a.m. :: Behind the Scenes of Electricity Markets

• Demand forecasting
• Unit commitment
• Economic dispatch
• Operating reserves
• Power flow

11:45 a.m. – 12:45 p.m. :: Components of Locational Marginal Prices

• Marginal energy
• Marginal loss
• Marginal congestion
• Shadow prices
• Shift factors

12:45 – 1:30 p.m. :: Break for Lunch

1:30 – 3:00 p.m. :: LMP Analysis Leads to LMP Forecasting

• Forecasting hub LMP versus node (generator) LMP
• Discontinuity from the past (ex: a new transmission line)
• Forecasting LMP components vs. forecasting LMP
• Bespoke models for nodes versus simulating the entire market
• Fundamentals vs. time series (historical prices)

3:00 – 3:15 p.m. :: Afternoon Break

3:15 – 5:00 p.m. :: Real-World Applications

• Data sources and detective work
• LMP forecasts depend on forecasts of the inputs
• Measuring error, gaining confidence
• Predicting negative LMPs
• Predicting LMP spikes (up and down)
• Good sites for renewables and storage
• “Fair” forecasting vs. risk analysis
• Real Time vs. Day Ahead LMPs
• Credibility, transparency, defensibility

5:00 p.m. :: Course Adjourns for the Day

 

Friday, December 15, 2023 : Central Time

 

9:00 – 10:00 a.m. :: Long-term (5 – 25 years) Price Forecasting

• Forecasting under uncertainty (scenario building)
• Why history is not a good predictor of the (renewable) future
• Production cost model with deterministic and stochastic inputs
• Capacity expansion model with exogenous inputs
• Iterating to get a consistent outlook
• Expecting the unexpected

10:00 – 10:30 a.m. :: Mid-term (1 – 10 years) Price Forecasting

• Impactful inputs for forecasting hub and node LMP
• Statistical models
• Production cost models (market software simulation)
• Change is the only constant

10:30 – 10:45 a.m. :: Morning Break

10:45 – 11:15 a.m. :: Short-term (1 week – 1 year) Price Forecasting

• Parameters and input variables
• Time series / statistical models
• Machine learning
• Production cost models
• Strengths and weaknesses, pitfalls, accuracy

11:15 – 11:45 a.m. :: Intra-day and Next-day Price Forecasting

• Choosing and Updating Inputs
• Time Series / Statistical Models
• Machine Learning
• Supplemental information (e.g., planned outages)

11:15 – 11:45 a.m. :: Intra-day and Next-day Price Forecasting

• Choosing and Updating Inputs
• Time Series / Statistical Models
• Machine Learning
• Supplemental information (e.g., planned outages)

11:45 a.m. – 12:15 p.m. :: What Can Be Done without Coding

• Creating models in MS Excel
• Scenario-building
• Consultants

12:15 p.m. :: Course Adjourns

Nicholas Pratley has worked in electrical power systems analysis and design for more than three decades.  He began his career as a consulting engineer designing power distribution for heavy industrial projects and moved on to become a subject matter expert in power systems analysis for software vendors and consulting firms. He has experience with generation interconnection studies and transmission planning, including more than 15 years in electricity market simulation and price forecasting. Mr. Pratley has received training on Plexos, GE MAPS and PROMOD IV production cost models, and provided training and consulting services using PROMOD for many years. Clients have included transmission owners and developers, municipal utilities deciding whether to join an ISO market or where to construct a new generating plant, competitive generation (IPP) developers forecasting transmission congestion risk for wind/solar/storage project siting and contract negotiation, and pension funds investing in renewable generation projects. His work has influenced decisions to acquire, divest, build or invest in dozens of projects worth multiple billions of dollars. In his current professional capacity, Mr. Pratley focuses on the U.S. northeast wholesale electricity markets, federal and state policy, and transmission plans with respect to large-scale renewable energy development.  He earned degrees in Electrical Engineering at McGill University and the Université de Montréal polytechnical school.

We will be using Microsoft Teams to facilitate your participation in the upcoming event. You do not need to have an existing Teams account in order to participate in the broadcast – the course will play in your browser and you will have the option of using a microphone to speak with the room and ask questions, or type any questions in via the chat window and our on-site representative will relay your question to the instructor.

• Microsoft recommends downloading and installing the Teams app if possible. You may also use the Edge browser or Chrome.
• You will receive a separate email with a unique link to a personalized landing page which will include links to join all sessions of this event.
• If you are using a microphone, please ensure that it is muted until such time as you need to ask a question.
• The remote meeting connection will be open approximately 30 minutes before the start of the course. We encourage you to connect as early as possible in case you experience any unforeseen problems.

Please Note: This event is being conducted entirely online. All attendees will connect and attend from their computer, one connection per purchase. For details please see our FAQ

If you are unable to attend at the scheduled date and time, we make recordings available to all attendees for 7 days after the event

REGISTER NOW FOR THIS EVENT:

LMP Forecasting - Methods and Applications

December 14-15, 2023 | Online

Your registration may be transferred to a member of your organization up to 24 hours in advance of the event. Cancellations must be received on or before November 03, 2023 in order to be refunded and will be subject to a US $195.00 processing fee per registrant. No refunds will be made after this date. Cancellations received after this date will create a credit of the tuition (less processing fee) good toward any other EUCI event. This credit will be good for six months from the cancellation date. In the event of non-attendance, all registration fees will be forfeited. In case of conference cancellation, EUCIs liability is limited to refund of the event registration fee only. For more information regarding administrative policies, such as complaints and refunds, please contact our offices at 303-770-8800

Credits

EUCI is accredited by the International Accreditors for Continuing Education and Training (IACET) and offers IACET CEUs for its learning events that comply with the ANSI/IACET Continuing Education and Training Standard. IACET is recognized internationally as a standard development organization and accrediting body that promotes quality of continuing education and training.

EUCI is authorized by IACET to offer 1.0 CEUs for this event

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Upon successful completion of this event, program participants interested in receiving CPE credits will receive a certificate of completion.

Course CPE Credits: 11.0
There is no prerequisite for this Course.
Program field of study: Specialized Knowledge
Program Level: Basic
Delivery Method: Group Internet Based
Advanced Preparation: None

EUCI is registered with the National Association of State Boards of Accountancy (NASBA) as a sponsor of continuing professional education on the National Registry of CPE Sponsors. State boards of accountancy have final authority on the acceptance of individual courses for CPE credit. Complaints regarding registered sponsors may be submitted to the National Registry of CPE Sponsors through its web site: www.nasbaregistry.org

 

Who Should Attend

Representative Organizations

• Independent power producers (IPPs) and merchant power ventures
• Consultants in transmission and markets
• Independent transmission developers
• Load-serving entities (LSEs) and utilities
• Wholesale trading companies
• Power marketers
• Energy service providers/companies (ESPs/ESCOs)
• Demand response providers/aggregators
• Consumer advocates
• Regulatory counsel
• State regulatory staff

Responsibilities

• Power market analysis
• Resource development and siting
• Generation and storage bidding
• Scheduling
• Asset management
• Contract structuring
• Contract administrators and analysts
• Integrated resource planning
• Financial marketers
• Energy finance and analysis
• Power trading
• Power supply analyst
• Revenue assurance
• Energy operations and supply
• Bulk power