[5][6] However, since the early 1990s, the process of deregulation and the introduction of competitive electricity markets have been reshaping the landscape of the traditionally monopolistic and government-controlled power sectors.
[7] At the corporate level, electricity load and price forecasts have become a fundamental input to energy companies’ decision making mechanisms.
The costs of over- or undercontracting and then selling or buying power in the balancing market are typically so high that they can lead to huge financial losses and bankruptcy in the extreme case.
A 2023 textbook covers electricity load forecasting and provides tutorial material written in the python language.
A generator, utility company or large industrial consumer who is able to forecast the volatile wholesale prices with a reasonable level of accuracy can adjust its bidding strategy and its own production or consumption schedule in order to reduce the risk or maximize the profits in day-ahead trading.