A Hybrid Approach for Hierarchical Forecasting of Industrial Electricity Consumption in Brazil

Abstract

The Brazilian industrial sector is the largest electricity consumer in the power system. Energy planning in this sector is important mainly due to its economic, social, and environmental impact. In this context, electricity consumption analysis and projections are highly relevant for the decision-making of the industrial sectorand organizations operating in the energy system. The electricity consumption data from the Brazilian industrial sector can be organized into a hierarchical structure composed of each geographic region (South, Southeast, Midwest, Northeast, and North) and their respective states. This work proposes a hybrid approach that incorporates the projections obtained by the exponential smoothing and Box–Jenkins models to obtain the hierarchical forecasting of electricity consumption in the Brazilian industrial sector. The proposed approach was compared with the bottom-up, top-down, and optimal combination approaches, which are widely used for time series hierarchical forecasting. The performance of the models was evaluated using the mean absolute percentage error (MAPE) and root mean squared error (RMSE) precision measures. The results indicate that the proposed hybrid approach can contribute to the projection and analysis of industrial sector electricity consumption in Brazil.