Load, Demand, Energy and Power

Let me start with the easy pair, power and energy. Power is the amount of energy consumed over time, while energy is the integral of power over time. In the electric power industry, the most frequently used units of power are kW (kilowatt) and MW (megawatt): 1MW = 1000kW = 1,000,000W. Consequently, the common units of energy are kWh (kilowatt hour) and MWh (megawatt hour). 

There are three types of power in an AC (alternating current) power system: active power or real power (in W, watt), reactive power (in Var, volt-ampere reactive) and complex power (in VA, volt-ampere). The magnitude of complex power is called apparent power (in VA). See Wikipedia for more details about AC power. 

The relationship among the three is: 

(active power)^2 + (reactive power)^2 = (apparent power)^2. 

This is also called the power triangle, where active power and reactive power are perpendicular to each other. Apparent power is always larger than or equal to the magnitude of active power and reactive power. A frequently made mistake is to treat apparent power as the sum of real power and reactive power. 

While "power" can be used in both generation (i.e., a 5MW solar farm) and delivery (i.e., an 13W CFL light bulb), we usually use "demand" to refer to the power on the delivery side. Therefore, the unit of demand is kW or MW. A frequently used term is peak demand, which refers to the maximum power consumed by a utility, state, city, small area, community, factory, house, or end use appliances.

On the consumption (or delivery) side, demand is the antonym of energy in some sense. For example, among many charges in an electricity bill, very often there are two charges that confuse customers, demand charge and energy charge. In a given billing period (BTW, I will write another blog post about billing month), the demand charge is based on the peak demand (again, in kW), while the energy charge is based on the total consumption (in kWh). 

Load is a very ambiguous term. To different people in different departments of a utility, load may mean different things, such as active power (in kW), apparent power (in kVA), energy (in kWh), current (in ampere), voltage (in volt) and even resistance (in ohm). In load forecasting, the "load" usually means demand (in kW) or energy (kWh). On hourly data, the magnitude of power and energy is the same, so we usually do not emphasize whether it is demand or energy. Strictly speaking, the magnitude of peak demand of an hour can be greater than the magnitude of hourly energy, because the peak demand is typically defined on a 15-minute interval.

The term energy forecasting has two definitions too. A narrow definition is "forecasting the energy (in kWh)", which is heavily used in financial planning and rate design. A broader one is "forecasting in the energy industry", which can be used for many subjects, such as gas and electric load forecasting, renewable generation forecasting, price forecasting, demand response forecasting, outage forecasting, and so forth. The latter definition has been used for several recent initiatives, such as the IEEE Working Group on Energy Forecasting, Global Energy Forecasting Competitions, IEEE Transactions on Smart Grid Special Section on Analytics for Energy Forecasting with Applications to Smart Grid, International Journal of Forecasting Special Issue on Probabilistic Energy Forecasting, and so forth. 

Back to Load Forecasting Terminology.