In Africa, as in many other parts of the world, both utility-scale and small-scale customer-installed renewable energy sources are becoming a sizeable portion of the total energy mix. This poses an enormous challenge for electricity grid operators who have to ensure enough generation to meet customers' demand every minute of every day.

Unlike traditional coal, gas and nuclear plants, the power output forecast from renewable energy is only as accurate as cloud cover and wind predictions. The month-ahead, week-ahead, day-ahead, hour-ahead and even half-hour ahead forecast has significant impact on the decisions a grid operator needs to make.

In most parts of the world, utilities no longer isolate themselves and consider only their own demand and supply requirements. Cross-border and even in-country trading have become the norm and a critical component in most countries’ energy mix. Being able to forecast national energy demand on a day-to-day or hour-to-hour basis used to be the key foundation ingredient to being able to optimally trade energy on the various short-term markets, i.e. day-ahead and hour-to-hour (intraday).

While demand forecasting is still critical, renewable generation is now a key variable, which is just as important but much more variable and difficult to forecast than aggregated customer demand. With rising energy costs, more discerning customers and greater competition, utilities can no longer afford to invest in the provision of spare capacity to cater for forecasting inaccuracies.

Highly accurate renewable generation forecasting has become essential for grid operators and traders alike.