Forecast value considering energy pricing in California

Comparison of NAM forecast revenue to perfect day-ahead forecast revenue shows that perfect forecast revenue is always greater. However, yearly NAM forecast revenue is as much as 98% of the perfect forecast revenue for some sites. After a bias-correction is applied to NAM forecasts, NAM forecast revenue decreases. This demonstrates that based on the observed DAM-RTM price spread, biased forecasts can have a higher forecast value than more accurate forecasts. However, when a deviation penalty is assessed, the most accurate forecasts always yield the highest total revenue.