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Governance scenario

AI Forecast Error

A public-facing demand forecast tool produces incorrect predictions during a cold snap, causing market participants to over-procure. NESO must explain the error and restore confidence.

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This is a fictionalised teaching scenario grounded in real institutional roles, published reforms, and current public-source context.

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Work through the decision path below. Each choice changes the route, the institutional trade-offs, and the metrics the scenario tracks.

AI Forecast Error

Step 1 of 2

NESO

The forecast said something wrong

NESO's public demand forecast portal predicted 52GW peak demand for tomorrow. The actual forecast should have been 58GW. The error was caused by a training data issue where recent cold weather patterns were underweighted. Suppliers saw the 52GW forecast and under-procured. Now, 6 hours before gate closure, they are scrambling to buy expensive short-term capacity. Screenshots of the incorrect forecast are circulating on social media.

What is at stake

  • -If you blame 'the AI', you avoid accountability and learn nothing.
  • -If you remove the tool without explanation, people assume a cover-up.
  • -Market participants have lost money based on your forecast.

What do you do immediately?

Current Metrics

System Security70
Affordability60
Net Zero Progress55
Customer Protection65
Operational Efficiency58
Stakeholder Trust55

Actors Involved

NESOOfgemSuppliersCitizens

Regulatory Context

Grid Code Section Q: Forecasting

Governance relationship map

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Operating loop breadcrumb

Governance→Planning→Operations→Outcomes→Evidence

Current focus: Rules and accountability

Legend

Governance and policy

Rules, remits, and accountability

Planning and investment

Connections, queue progression, and delivery planning

System operations

Real-time balancing and network operation

Market and consumer outcomes

Prices, settlement, reliability, affordability

Evidence and learning

Telemetry, assurance, and continuous improvement

Glossary

  • Dispatch

    Real-time instructions to increase or reduce generation or demand so supply stays in balance.

  • Balancing

    The continuous process of matching electricity supply to demand while maintaining system frequency.

  • Constraint

    A technical limit in the network that restricts how power can flow under current conditions.

  • Industry code

    A formal rulebook that defines obligations and processes for specific market and network activities.

  • Connection agreement

    The formal agreement setting technical and milestone conditions for connecting a project to the network.

  • Settlement

    The process that turns metered and contractual positions into final market cashflow outcomes.

  • Conformance gate

    A quality checkpoint that verifies whether data or implementation meets agreed standards.

  • LTDS

    Long Term Development Statement publication requirements for distribution network data.

Guided tour

Step 1 of 8

Who sets the rules?

Start with governance: policy direction, regulatory oversight, licences, and code obligations.

Why it matters: Newcomers should first understand where authority sits before interpreting operational decisions.

Open Ofgem licence and code guidance

Preparing system graph…

Use this map to keep scenario decisions anchored to policy, coordination, operational delivery, and evidence feedback relationships.

Sources and methodology

How this page was assembled

Scenarios are designed as regulator-safe teaching runs. Institutional roles, programme context, and cited reform pathways stay grounded in current public sources, while event details and numbers inside the run remain fictionalised unless explicitly evidenced elsewhere. This scenario is framed against Grid Code Section Q: Forecasting.

Last reviewed 18 March 2026

Primary sources

Ransford's Notes