Online machine learning approach for system marginal price forecasting using multiple economic indicators: A novel model for real-time decision making

In comparison to other countries, South Korea has a high reliance on energy, with the majority of its electricity being generated by a government-run company to ensure a stable and affordable supply. Unlike the "pay-as-bid" pricing approach, South Korea utilizes the system marginal price (SMP), also known as "pay-as-clear." Accurate SMP forecasting is crucial for guaranteeing steady economic growth because manufacturing is South Korea's flagship industry and accounts for 50 % of the nation's power consumption. In this study, a combination of machine learning-based batch learning and online learning techniques were employed to forecast the SMP in South Korea, utilizing a dataset consisting of five energy sectors, two financial sectors, and one transportation sector. The analysis of the F-value revealed that the coal sector, which is one of the energy sectors, had the most significant influence on SMP indicating the greatest score of 2,328. In this study, three machine learning models, namely support vector regression, simple deep neural network, and deep neural network, were suggested and compared for batch learning to determine the best-trained model. The evaluation metrics were used to assess the performance of these models. Based on the results obtained, the simple deep neural network was found to outperform the other models in terms of accuracy. Furthermore, two methods such as weight modification and time interval updating between inputs and output were employed for online learning based on the trained batch model. Upon the implementation of model updates, an ongoing assessment of its performance transpired utilizing the metrics of coefficient of determination, root mean square error, mean absolute error, and mean absolute percentage error. The average values for these metrics were observed to be 0.924, 7.991, 5.035, and 0.052, respectively. This study is expected to provide direct assistance in the formulation of energy plans for decision-makers in the industrial sector.