Evaluating the Impact of Feature Dimensionality on Price Prediction in the Indian Electricity Market

Accurate forecasting of electricity prices is essential for efficient operation and decision-making in deregulated power markets, particularly in the Indian electricity market, characterized by high volatility and dynamic pricing. This study presents a comparative analysis of statistical, machine learning, and deep learning methods for electricity price prediction in the Indian market, with a focus on feature dimensionality. The evaluated models include autoregressive-integrated-moving average, seasonal autoregressive-integrated-moving average, seasonal autoregressive-integrated-moving average with exogenous variables, categorical boosting, random forest, long short-term memory, bidirectional long short-term memory, and a hybrid convolutional neural network-bidirectional long short-term memory model. Historical data available on the Indian Energy Exchange webpage are deployed in this study. The models are analyzed for varying input vector sizes with features that include date, type of day, day of the week, previous day, month, and year market prices. The results indicate improved predictive performance of all model while increasing the input feature dimensionality from five to seven. The results indicate that while increasing the feature size from five to seven increases the prediction accuracy, the gains become marginal beyond seven, emphasizing the importance of feature relevance over feature quantity. From a theoretical perspective, the study highlights the dominance of short-term temporal dependencies in MCP prediction and provides empirical evidence for the point of diminishing returns in feature expansion. From a practical standpoint, the results endorse the choice of computationally efficient and interpretable models for real-world deployment.