Study of potential impact of wind energy on electricity price using regression techniques

• Main Authors: Kumar, Neeraj, Tripathi, Madan Mohan, Gupta, Saket, Alotaibi, Majed A., Malik, Hasmat, Afthanorhan, Asyraf
• Format: Article
• Language: English
• Published: MDPI 2023
• Subjects: TK Electrical engineering. Electronics Nuclear engineering
• Online Access: http://eprints.utm.my/107350/1/HasmatMalik2023_StudyofPotentialImpactofWindEnergy.pdf; http://eprints.utm.my/107350/; http://dx.doi.org/10.3390/su151914448
• Institution: Universiti Teknologi Malaysia

This paper seeks to investigate the impact analysis of wind energy on electricity prices in an integrated renewable energy market, using regression models. This is especially important as wind energy is hard to predict and its integration into electricity markets is still in an early stage. Price forecasting has been performed with consideration of wind energy generation to optimize energy portfolio investment and create an efficient energy-trading landscape. It provides an insight into future market trends which allow traders to price their products competitively and manage their risks within the volatile market. Through the analysis of an available dataset from the Austrian electricity market, it was found that the Decision Tree (DT) regression model performed better than the Linear Regression (LR), Random Forest (RF), and Least Absolute Shrinkage Selector Operator (LASSO) models. The accuracy of the model was evaluated using the Mean Absolute Error (MAE), Root Mean Squared Error (RMSE), and Mean Absolute Percentage Error (MAPE). The MAE values considering wind energy generation and without wind energy generation for the Decision Tree model were found to be lowest (2.08 and 2.20, respectively) among all proposed models for the available dataset. The increasing deployment of wind energy in the European grid has led to a drop in prices and helped in achieving energy security and sustainability.