Backcast for a Better Forecast
What is a Backcast?
A Backcast is the process of exploring past events based on information that we know to date.
For North American power markets, Horizons Energy compares known historical values for market prices and unit operation against values obtained within the power planning model, EnCompass, as part of the development its Simulation Ready database.
Subsequently, Horizons forecasts market prices, unit operations, resource expansion/retirement, emissions, and fuels for 78 different North American power markets for the years 2017-2050.
The process of backcasting is time-consuming, difficult work involving manipulation and review of large databases; however, the benefits a backcast yields are significant.
A backcast validates the forecast. It can indicate the forecast model’s strength of prediction, provides insights of the impacts of different input assumptions, and often helps to identify where either the model or data need refinement. Finally, it helps decision makers and analysts gain confidence in the subsequent forecast. Horizons Energy believes that a well-designed backcast is a necessary step in the development of a forward-looking forecast.
The Horizons Energy Backcast
Horizons Energy produced a backcast for the years 2000 to 2015 based on a host of factors, including: actual historical hourly demand for electricity, the resources on-line, fuel prices, nuclear maintenance, monthly equivalent forecasted outage rates for coal units, and monthly capacity factors for hydro generation.
By applying this information to the EnCompass planning model, Horizons backcasts the unit operations and market prices over the 2000-2015 time-period. This produces an ‘ex post forecast’ over that time period to compare to the actual values by technology and power market.