Dynamic mean absolute error as new measure for assessing forecasting errors

Abstract

Accurate wind power forecast is essential for grid integration, system planning, and electricity trading in certain electricity markets. Therefore, analyzing prediction errors is a critical task that allows a comparison of prediction models and the selection of the most suitable model. In this work, the temporal error and absolute magnitude error are simultaneously considered to assess the forecast error. The trade-off between both types of errors is computed, analyzed, and interpreted. Moreover, a new index, the dynamic mean absolute error, DMAE, is defined to measure the prediction accuracy. This index accounts for both error components: temporal and absolute. Real cases of wind energy forecasting are used to illustrate the use of the new DMAE index and show the advantages of this new index over other error indices.