Page 323 - Data Science Algorithms in a Week

304 Mayra Bornacelli, Edgar Gutierrez and John Pastrana

 UK created a tax (Carbon Floor) above the price of CO2 – This tax artificially
benefits the generation of less CO2 emitting energy (renewable and natural gas)
over all existing technologies with a direct impact on energy costs to the end user
 Development of the tracking method to extract the shale gas profitably - The
cost effective gas produced with this method displaced part of the coal in the
USA. The coal that was not consumed locally then began to be exported, which
increased the world supply and therefore reduced prices.

The problem that we try to solve is summarized in three aspects:

1. Markets such as the oil and coal are oligopolies, which means, the fluctuations of
their prices is determined by variables that shape their demand and offer in the
market.
2. Over time, analysts have identified some of these variables (and even introduced
new ones). However, the relationship between the variables and their order of
importance is not clear yet. This type of study is relevant to find patterns with
respect to the price and not analyzing independent events.
3. Each of the variables that have shaped the coal price, have generated their own
strength (positive or negative) in the price, and about these events the
stakeholders have historically reacted.

The objective of this research is to determine the most influential variables in the
price of thermal coal by using the Delphi methodology and the subsequent evaluation of
the results with AI techniques such as neural networks and regression trees.

METHODOLOGY

This project proposes an analytical framework that allows managers to analyze prices
in the thermal coal industry. Figure 1 shows the general research framework. From the
data acquisition, data process, the use of models, and their outputs. With this framework
analyzers may have a tool to deal with volume of data and diversity, handle the
imprecisions and provide robust solutions for price prediction.
This process determines challenges and opportunities that a company could face from
the data gathering until their analysis and use to create value and optimize their business
model.