Grey prediction with residual modification using functional-link net and its application to energy demand forecasting

Abstract

PurposeEnergy demand is an important economic index, and demand forecasting has a significant role when devising energy development plans for cities or countries. GM(1,1) model has become popular because it needs only a few data points to construct a time-series model without statistical assumptions. Several methods have been developed to improve prediction accuracy of the original GM(1,1) model by only estimating the sign of each residual. This study aims to address that this is too tight a restriction for the modification range.Design/methodology/approachBased on the predicted residual, this study uses the functional-link net (FLN) with genetic-algorithm-based learning to estimate the modification range for its corresponding predicted value obtained from the original GM(1,1) model.FindingsThe forecasting ability of the proposed grey prediction model is verified using real energy demand cases from China. Experimental results show that the proposed prediction model performs well compared to other grey residual modification models with sign estimation.Originality/valueThe proposed FLNGM(1,1) model can improve prediction accuracy of the original GM(1,1) model using residual modification. The distinctive feature of the proposed model is to use an FLN to estimate sign and modification range simultaneously for the predicted value based on its corresponding predicted residual obtained from the residual GM(1,1) model.