Multilayer perceptron for short-term load forecasting: from global to local approach

Many forecasting models are built on neural networks. The key issues in these models, which strongly translate into the accuracy of forecasts, are data representation and the decomposition of the forecasting problem. In this work, we consider both of these problems using short-term electricity load demand forecasting as an example. A load time series expresses both the trend and multiple seasonal cycles. To deal with multi-seasonality, we consider four methods of the problem decomposition. Depending on the decomposition degree, the problem is split into local subproblems which are modeled using neural networks. We move from the global model, which is competent for all forecasting tasks, through the local models competent for the subproblems, to the models built individually for each forecasting task. Additionally, we consider different ways of the input data encoding and analyze the impact of the data representation on the results. The forecasting models are examined on the real power system data from four European countries. Results indicate that the local approaches can significantly improve the accuracy of load forecasting, compared to the global approach. A greater degree of decomposition leads to the greater reduction in forecast errors.