Development of a methodology for clustering electricity-price series to improve customer response initiatives

Abstract

The aim of this study is to propose a methodology in order to obtain a better support management decisions in terms of planning of bids and energy offers in real-time energy markets. Specifically, the authors use self-organising maps and statistical Ward's linkage to classify electricity market prices into different clusters (high homogeneity inside each cluster). In the second stage, the authors use non-parametric estimation to extract some price patterns in the above mentioned clusters. The knowledge contained within these patterns supplies customers with market-based information on which to focus its energy use decisions. The methodology proposed has been applied to New England (USA) market.