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The demand for energy continues to grow as the world's population increases. And to ensure we meet these demands, utility and energy companies need reliable energy demand forecasting: an approach for predicting future energy requirements to establish a demand-supply balance.
ML — the application of algorithms and statistical models to evaluate data patterns, allowing computer systems to learn and adapt without relying on explicit instructions — has drastically altered the way energy companies plan for future operations. In fact, data from Statista shows that 59% of executives use machine learning (ML) to future-proof shifting demands and operational difficulties in organizations.
Let's take a look at the predictive power of ML in the energy and utilities sectors.
Energy demand forecasting has traditionally been undertaken from two perspectives: top-down and bottom-up. Top-down models (including econometric models, time series models and regression analysis) predict energy demand by first looking at macroeconomic variables such as GDP, population growth and weather patterns.
Meanwhile, bottom-up models (end-use forecasting models, building energy simulation models and industrial energy consumption models) begin by looking at individual end-users: households and businesses, then aggregate upwards to forecast energy demand.
While the methods did their good for years, they had limitations, which caused several downfalls. Some include:
ML streamlines processes and increases productivity and efficiency. In the case of energy demand forecasting, ML has changed the process and proven more beneficial than traditional methods alone. Here are some of the positive outcomes of ML in energy demand forecasting:
Perle Systems is dedicated to offering cutting-edge technological solutions to a range of industries, including energy and utility. Contact us to learn how we can help your organization operate more efficiently and sustainably.
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