Day 1 – Session 2a

Need for Demand Forecasting and

Fundamentals of DF
Why utilities need crystal ball?
• Electricity must be supplied when
demanded
• Electrical demand changes on
hourly, daily, weekly, monthly,
annual basis
• To ensure supply reliability, utilities
must foresee demand, to properly
plan

Demand Forecasting Training by CPPA Slide 2

Why utilities need crystal ball?
• Core Utility Objectives:
• Supply power at highest level of reliability
• Quality at minimum possible price

• Core Utility Functions:

• Planning
• Investment
• Operations (supply and maintain)
• Customer Service
• Billing and Finance
• Peripheral Services (IT, HR, Admin, etc.)

• Price of electricity based on cost of functions:

Demand Forecasting Training by CPPA Slide 3

Why utilities need crystal ball?
• Types of Planning:
• Investment Planning: Requirement of new and enhancement of existing
infrastructure
• Maintenance/Preparation Planning: When to perform maintenance,
procure and plan resources
• Dispatch and Resource Commitment Planning: Availability and
deployment of resources to meet changing demand

• All Types of Planning are based on Demand Forecasting

Demand Forecasting Training by CPPA Slide 4

Electricity Demand is very Dynamic

LESCO Average Weekday/Weekend Profiles (Jan and Jul, 2008 and 2012)

4000

3500

3000

2500
Demand (MW)

2000

1500

1000 2008 - Jan

2008 - Jul
2011 - Jan
500
2011 - Jul

0
00:00

01:00

02:00

03:00

04:00

05:00

06:00

07:00

08:00

09:00

10:00

11:00

12:00

13:00

14:00

15:00

16:00

17:00

18:00

19:00

20:00

21:00

22:00

23:00
Demand Forecasting Training by CPPA Slide 5
 Effects of Poor Forecasting

• Poor forecasting leads to poor planning and;

• Over-Investment: Increased price of electricity
• Under-Investment: Loss of; revenue, supply quality, customer
satisfaction, regulatory penalties
• Poor Maintenance: Poor supply quality, loss of revenue and customer
satisfaction, regulatory penalties
• Poor Operation: Imbalance in supply and demand, poor economics of
unit dispatch, increased costs and price of electricity, loss of customer
satisfaction, regulatory penalties

Demand Forecasting Training by CPPA Slide 6

 Fundamentals of Fortune Telling
• “In Sha Allah, my Son will make a fine doctor” - Forecast?
• Or a wish/hope?
• Then what is forecasting?
• “In Sha Allah, my Son will make a fine doctor, IF he works hard,
has interest in medicine, secures enough marks, and does well in
medical college”
• Accuracy of Forecasting is conditional and depends on history
(how?)

Demand Forecasting Training by CPPA Slide 7

Fundamentals of Fortune Telling?

• Conditionality: Forecasting dependent on other factors (he

works hard, has interest in medicine, secures enough marks,
and does well in medical college)
• Level of Conditionality? (how much on; hard work, interest in
medicine, etc.)
• Level of Conditionality depends on historic relationship between
what is forecasted and external factors
• Other examples of forecasting in daily life?
• Fundamentals of FC: External Factors + History

Demand Forecasting Training by CPPA Slide 8

Fortune Telling = Forecasting?

Fortune Telling Forecasting

Intuitive Evidence Based

Absolute/Definitive Probable/Likely with caveats

Inflexible Flexible

Single Scenario Multiple Scenario

Irrational/No foundation Built on solid rationale/Evidence

Higher Error Margin and Frequency Higher Accuracy/Reliability

None is 100% accurate

Demand Forecasting Training by CPPA Slide 9

 Fundamentals of Forecasting
• If;
• he works hard (WH)
• has interest in medicine (IiM)
• secures enough marks (SEM)
• does well in medical college (WiMC)
• probability he will become a fine doctor (BFD)

• Forecast;
BFD= 99 + 12.3546 × 𝑊𝐻 + 𝑆𝐸𝑀 𝑛 σ𝑛𝑘=0 𝑛𝑘 𝐼𝑖𝑀𝑘 𝑊𝑖𝑀𝑛−𝑘
+ 5% with 95% confidence (probability/likelihood)
• Where;
k = Years of education

Demand Forecasting Training by CPPA Slide 10

Fundamentals of Demand Forecasting

• Establish Drivers (external factors) of Power Demand

• Discover nature of relationship between Demand and Drivers
• Mathematical model on relationship between demand and
drivers
• Different techniques to apply model (vice versa)
• Check validity of model using historic data of actual demand and
drivers
• Establish associated error and confidence?

Demand Forecasting Training by CPPA Slide 11

Fundamentals of Demand Forecasting

Drivers of Power Demand (among many)

• Commercial, Industrial and Public Activity (GDP)
• Type of Industrial and Commercial Activity
• Population/ Number of Connections
• Special/Large Projects
• Weather Conditions
• Level of Electrification
• Power appliance penetration and saturation
• Technical specifications of appliances
• Usage behavior
• Government policy and its implementation
• Price of electricity and price elasticity

Demand Forecasting Training by CPPA Slide 12

Fundamentals of Demand Forecasting

Modelling to Forecast Power Demand

• Not all drivers have same impact on demand
• Not all drivers are used in forecasting
• Choice of drivers changes by type of forecasting
• Simple Causal Model;

Y = a0 + a1X1 + a2X2 +. . . + anXn

• Where; Y to be forecasted
• X1, X2, . . . , Xn are drivers of Y
• and a0, a1, ……… are coefficients of Xs

Demand Forecasting Training by CPPA Slide 13

Demand Forecasting Approaches

• Power demand originates from operation of power equipment

• Aggregates to facility (building), area/locality (feeder,
transformer), region (substation), system (transmission,
generation)
• However, demand at system level is often of most concern
• Two forecasting approaches;
• Top Down: Forecast at top level (system) and breakdown towards bottom
(region, area, customer class, end-use)
• Bottom Up: Forecast at bottom and aggregate to top

Demand Forecasting Training by CPPA Slide 14

Demand Forecasting: Top Down

System NTDC

Region DISCO1 DISCO2

Substation SS1 SS2 SS3

Feeder TR1 TR2 TR1

Sector Ind Res Ind

Customer Class Metal Paper Metal

Demand Forecasting Training by CPPA Slide 15

Demand Forecasting: Bottom Up

System NTDC

Region DISCO1 DISCO2

Substation SS1 SS2 SS1

Feeder TR1 TR2 TR1

Sector Ind Res Ind

Customer Class Metal Paper Metal

Demand Forecasting Training by CPPA Slide 16

And what do we forecast?

Traditionally for all planning purposes;

• Value of Annual Peak Demand (MW)
• Annual Energy Consumption (GWh)
• Annual Load Factor (outcome of above two)
• All above for all layers (System, region, substation, etc.)on annual and 5-10
year basis

Demand Forecasting Training by CPPA Slide 17

And what do we forecast?

Modern utilities require more;

• Value of Annual and Monthly Peak Demand (MW)
• Annual and Monthly Energy Consumption (GWh)
• Annual and Monthly Time of Peak Demand (dd/mm/yy hh:mm)
• Annual and Monthly Load Factor
• Annual and Monthly Peak to Off Peak Energy Ratio
• Annual and Monthly % Contribution to higher level demands
• Even demand profile
• All above for all layers (System, region, substation, etc.)on 5-10 year basis

Demand Forecasting Training by CPPA Slide 18

How Difficult Demand Forecasting can be?

Demand Forecasting Training by CPPA Slide 19

 Day 1 – Session 2b
Regulatory Requirements for Demand
Forecasting (Grid Code , Distribution
Code)
Main Stakeholders – Transmission Grid

• Transmission Grid
• NTDC

• Transmission Level Customers

• DISCOs

• Externally Connected Consumers

• Externally Connected Parties

• GENCOs connected to NTDC System Sys

• Special Purpose Transmission Licensee

• IPPs/ Generators

Demand Forecasting Training by CPPA Slide 21

Main Stakeholders – Distribution Grid

• Distribution Grid
• Distribution Load Dispatch Centre

• Consumers including BPCs

• DISCOs

• Externally Connected Parties

• GENCOs/ IPPs connected to 132kV System

• Embedded GENCOs

• SPPs

• All Other Distribution Licensees

Demand Forecasting Training by CPPA Slide 22

 Responsibility
Types of Forecast Horizon/Time Factors to be
Codes to prepare Forecasts Outputs Ref.
Scales accounted For
Forecast
Operation Forecast 1. historic demand 1. Active Energy
for real time data; Demand
operations 2. weather forecasts 2. Reactive Energy
3. Consumer
1. Operational Demand • DOC 1
Generating Unit
Planning Phase (8 1. Hourly Schedules; 3. Annual Energy • DPC 5
weeks to 1 year Forecast 4. Demand transfers; Consumption
ahead) (Operational) 5. Interconnection and Peak
Distributio facilities with
2. Programming 2. Annual DISCO Demand Forecast
n Code Phase (24 hours to Forecast for adjacent distribution
companies; and
8 weeks ahead) up to 5 years
6. Any other factor
3. Control Phase (0 (Planning) reasonably
to 24 hours ahead) considered
Short to medium term necessary.
load forecast

1. Operational 1. Hourly 1. Operational For Operational Forecast: 1. Active Energy • OC 2

Forecast Forecast Forecast by 1. Information Supplied Demand • OC
2. Planning Forecast (Operational) NPCC by the Users 2. Reactive Energy 4.3.3
2. Annual 2. Planning 2. Any other external Demand • PC 4.2
Forecast for Forecast by factors 3. Annual Energy
up to 20 NTDC For Planning Forecast: Consumption
years 1. economic activity, and Peak
Grid Code (Planning) 2. population trends Demand Forecast
3. Industrialization
4. Weather
5. distribution
companies forecasts
6. demand side
management
7. load shedding etc.
Demand Forecasting Training by CPPA
Slide 23
Distribution Code

Demand Forecasting Training by CPPA Slide 24

 DISTRIBUTION OPERATING CODE NO. 1

• This code is concerned with demand forecasting as related to Operational

and Planning Timescales
• Active Demand and Reactive Demand data to be provided by all
consumers to the DISCO
• DISCOs needs to acquire data in three phases
• Operational Planning Phase (8 weeks to 1 year ahead)

• Programming Phase (24 hours to 8 weeks ahead)

• Control Phase (0 to 24 hours ahead)

• Based on information provided by the consumers, DISCO shall prepare its

demand forecast for the real time.

Slide 25 Demand Forecasting Training by CPPA

 DISTRIBUTION OPERATING CODE NO. 1
Data Requirements (DOC 1.3.2 Appendix 1)
• Operational Planning Phase (8 weeks to 1 year ahead)
• Date and Time of Annual NTDC System Maximum and Minimum Power Demand as
notified by the NTDC

• Hourly Maximum and Minimum Annual Power usage of distribution company with
reference to Maximum and Minimum NTDC System demand at a specified date and
time at each transmission connection point

• Annual energy Forecast demand at annual average conditions of all the different
categories of consumers connected to the distribution company's system.

• Maximum generation output in MW by all the embedded generating plants at a

specified date and time of annual Peak Hours on NTDC's system

Slide 26 Demand Forecasting Training by CPPA

 DISTRIBUTION OPERATING CODE NO. 1
Data Requirements (DOC 1.3.3 Appendix 2)
• Programming Phase (24 hours to 8 weeks ahead)
• Hourly operational schedule of each embedded generating unit whose output is
more than 1 MW and is not subject to central dispatch.

• All the Bulk Power Consumers and other distribution companies connected to the
DISCO system shall intimate to the DISCO the specific date and time where the
aggregate change in their load due to their operation is expected to be more than 1
MW.

• Any other relevant Demand forecast information reasonably required by the DISCO.

Slide 27 Demand Forecasting Training by CPPA

 DISTRIBUTION OPERATING CODE NO. 1
Data Requirements (DOC 1.3.4 Appendix 3)
• Control Phase (0 to 24 hours ahead)
• Intimation by all the embedded generating plants to the licensee in case the
difference of their hourly output is more than 1 MW as compared to their schedule
of generation already notified

• Intimation by all the Bulk Power Consumer to the licensee the detail of changes in
the demand if such changes are more than 1 MW.

Slide 28 Demand Forecasting Training by CPPA

 DISTRIBUTION OPERATING CODE NO. 1
(DOC 1.4)
• Factors to be taken into account during preparation of Demand Forecasting in
the operational planning phase:
• Historic demand data;
• Weather forecasts (Note: Responsibility for weather correction of
Consumer’s load rests with the User);
• Incidence of major events or activities;
• Consumer Generating Unit Schedules;
• Demand transfers;
• Interconnection facilities with adjacent distribution companies; and
• Any other factor reasonably considered necessary.

Slide 29 Demand Forecasting Training by CPPA

 Distribution Planning Code
(DPC 5)
• DISCOs shall prepare each year a short to medium term load forecast for a period of 5 (five) years

• DISCOs shall adopt appropriate and established load forecasting methodology using reliable data
and relevant indices.

• Forecasting Methods:

• Historical population and load growth analysis

• Land use and zoning methods

• End-use energy methods

• Any other reasonable and justifiable method

• Consumer category wise loads shall be identified

• Time period shall be identified as short to medium term (1-5 years)

• DISCOs shall work out the annual energy requirement and Peak Demand for each of the coming
five years relating to each point of interconnection on the basis of its load forecast.

Demand Forecasting Training by CPPA

Slide 30
 Grid Code

Demand Forecasting Training by CPPA Slide 31

 OPERATION CODE No.2

• This code is concerning Demand Forecasting as related to

Operational Timescales
• This code covers Active Demand and Reactive Demand forecasts
• In advance of real time operations, demand forecasting shall be
consolidated/developed by NTDC on the basis of demand forecasts
provided by individual Users.
• For real-time operations, NTDC shall conduct its own demand
forecasting taking into account information supplied by all the Users,
and any other external factors that it may deem necessary
• This code sets out procedures and specifies time scales for data
collection from Network Users for preparation of demand forecasts

Demand Forecasting Training by CPPA Slide 32

 OPERATION CODE (OC.4.4.3.3)

• The System Operator shall prepare the annual NTDC Demand

Forecast including values for the peak Summer Demand.

Demand Forecasting Training by CPPA Slide 33

 PLANNING CODE (PC 4.2)
• Three levels of load forecasts should be employed for a time horizon
of at least next twenty years for the long-term. The three levels are:
• High Growth
• Medium Growth and
• Low Growth projections
• Factors that are to be taken into account when preparing the load
forecasts are:
• economic activity,
• population trends
• Industrialization
• Weather
• distribution companies forecasts
• demand side management
• load shedding etc.

Demand Forecasting Training by CPPA Slide 34