Forecasting the U.S. Renewable-Energy Mix with an ALR-BDARMA Compositional Time-Series Framework
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| Format: | Preprint |
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2025
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| _version_ | 1866914109213114368 |
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| author | Katz, Harrison Maierhofer, Thomas |
| author_facet | Katz, Harrison Maierhofer, Thomas |
| contents | Accurate forecasts of the US renewable-generation mix are critical for planning transmission upgrades, sizing storage, and setting balancing-market rules. We present a Bayesian Dirichlet ARMA (BDARMA) model for monthly shares of hydro, geothermal, solar, wind, wood, municipal waste, and biofuels from January 2010 to January 2025. The mean vector follows a parsimonious VAR(2) in additive-log-ratio space, while the Dirichlet concentration parameter combines an intercept with ten Fourier harmonics, letting predictive dispersion expand or contract with the seasons.
A 61-split rolling-origin study generates twelve-month density forecasts from January 2019 to January 2024. Relative to three benchmarks, a Gaussian VAR(2) in transform space, a seasonal naive copy of last year's proportions, and a drift-free additive-log-ratio random walk, BDARMA lowers the mean continuous ranked probability score by fifteen to sixty percent, achieves component-wise ninety percent interval coverage close to nominal, and matches Gaussian VAR point accuracy through eight months with a maximum loss of 0.02 Aitchison units thereafter. BDARMA therefore delivers sharp, well-calibrated probabilistic forecasts of multivariate renewable-energy shares without sacrificing point precision. |
| format | Preprint |
| id |
arxiv_https___arxiv_org_abs_2507_04087 |
| institution | arXiv |
| publishDate | 2025 |
| record_format | arxiv |
| spellingShingle | Forecasting the U.S. Renewable-Energy Mix with an ALR-BDARMA Compositional Time-Series Framework Katz, Harrison Maierhofer, Thomas Applications Accurate forecasts of the US renewable-generation mix are critical for planning transmission upgrades, sizing storage, and setting balancing-market rules. We present a Bayesian Dirichlet ARMA (BDARMA) model for monthly shares of hydro, geothermal, solar, wind, wood, municipal waste, and biofuels from January 2010 to January 2025. The mean vector follows a parsimonious VAR(2) in additive-log-ratio space, while the Dirichlet concentration parameter combines an intercept with ten Fourier harmonics, letting predictive dispersion expand or contract with the seasons. A 61-split rolling-origin study generates twelve-month density forecasts from January 2019 to January 2024. Relative to three benchmarks, a Gaussian VAR(2) in transform space, a seasonal naive copy of last year's proportions, and a drift-free additive-log-ratio random walk, BDARMA lowers the mean continuous ranked probability score by fifteen to sixty percent, achieves component-wise ninety percent interval coverage close to nominal, and matches Gaussian VAR point accuracy through eight months with a maximum loss of 0.02 Aitchison units thereafter. BDARMA therefore delivers sharp, well-calibrated probabilistic forecasts of multivariate renewable-energy shares without sacrificing point precision. |
| title | Forecasting the U.S. Renewable-Energy Mix with an ALR-BDARMA Compositional Time-Series Framework |
| topic | Applications |
| url | https://arxiv.org/abs/2507.04087 |