Short-Term Electricity Price Forecasting: A Review of Point Forecasting Methods, Metrics, and Empirical Evaluation

Abstract

Increasing variability in electricity production and demand contributes to greater electricity price volatility across different markets. The effective implementation of business processes related to broadly defined electricity trading therefore requires reliable electricity price forecasts. Consequently, electricity price forecasting has grown in both importance and research interest. This article presents an in-depth literature review of short-term point electricity price forecasting at the native temporal resolutions of the reviewed markets, primarily hourly and 30 min intervals, with selected studies using 15 min and 5 min intervals. The review concerns forecasts of individual market-interval prices and does not address forecasts of daily aggregated prices. The analysis covers the input data used in forecasting models, the main forecasting approaches, modelling techniques, and error measures. Forecast quality is examined with respect to market characteristics, forecasting methods, and explanatory variables. General trends in the reported results are identified, together with descriptive relationships among selected error measures. Particular attention is given to the RMSE-to-MAE ratio, referred to in this review as the Error Dispersion Factor (EDF), which is treated solely as a descriptive summary of the relative inequality of absolute forecast-error magnitudes in a given sample. The article concludes with findings and recommendations concerning best practices in electricity price forecasting. The review differs from broader conceptual and market-specific surveys by focusing narrowly on short-term point forecasts for individual market delivery intervals and by providing a structured quantitative synthesis of studies published between January 2021 and May 2026.