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Combining forecasts of electricity consumption in China with time-varying weights updated by a high-order Markov chain model


  • Zhao, Weigang
  • Wang, Jianzhou
  • Lu, Haiyan


Electricity consumption forecasting has been always playing a vital role in power system management and planning. Inaccurate prediction may cause wastes of scarce energy resource or electricity shortages. However, forecasting electricity consumption has proven to be a challenging task due to various unstable factors. Especially, China is undergoing a period of economic transition, which highlights this difficulty. This paper proposes a time-varying-weight combining method, i.e. High-order Markov chain based Time-varying Weighted Average (HM-TWA) method to predict the monthly electricity consumption in China. HM-TWA first calculates the in-sample time-varying combining weights by quadratic programming for the individual forecasts. Then it predicts the out-of-sample time-varying adaptive weights through extrapolating these in-sample weights using a high-order Markov chain model. Finally, the combined forecasts can be obtained. In addition, to ensure that the sample data have the same properties as the required forecasts, a reasonable multi-step-ahead forecasting scheme is designed for HM-TWA. The out-of-sample forecasting performance evaluation shows that HM-TWA outperforms the component models and traditional combining methods, and its effectiveness is further verified by comparing it with some other existing models.

Suggested Citation

  • Zhao, Weigang & Wang, Jianzhou & Lu, Haiyan, 2014. "Combining forecasts of electricity consumption in China with time-varying weights updated by a high-order Markov chain model," Omega, Elsevier, vol. 45(C), pages 80-91.
  • Handle: RePEc:eee:jomega:v:45:y:2014:i:c:p:80-91
    DOI: 10.1016/

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    18. Xiao, Ling & Wang, Jianzhou & Dong, Yao & Wu, Jie, 2015. "Combined forecasting models for wind energy forecasting: A case study in China," Renewable and Sustainable Energy Reviews, Elsevier, vol. 44(C), pages 271-288.
    19. Yi Liang & Dongxiao Niu & Ye Cao & Wei-Chiang Hong, 2016. "Analysis and Modeling for China’s Electricity Demand Forecasting Using a Hybrid Method Based on Multiple Regression and Extreme Learning Machine: A View from Carbon Emission," Energies, MDPI, Open Access Journal, vol. 9(11), pages 1-22, November.
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