- Conference Article
- 10.1109/compsac65507.2025.00054
Statistical and Deep Learning Approaches for Risk Assessment and Volatility Forecasting in Renewable Energy Investments
- Jul 08, 2025
- Shalini Jayanetti + 5 more +5
The climate crisis has sparked a global shift toward renewable energy sources, increasing the demand for models that provide accurate risk assessment and forecasting to support informed investment decisions. The novelty of this study is to analyze renewable energy investments through three methodological approaches: risk assessment, deep learning-based volatility forecasting, and renewable energy demand forecasting. First, risk profiles of two renewable energy stocks (NextEra Energy and Iberdrola) and two traditional energy stocks (ExxonMobil and Chevron) are evaluated for the time period 2020 to 2024. Second, deep learning (DL) models such as recurrent neural network (RNN), long short-term memory (LSTM), gated recurrent unit (GRU), bidirectional long short-term memory (BiLSTM), bidirectional gated recurrent unit (BiGRU) are employed, and it is shown that renewable energy stocks have more stable performance across all DL models, with BiLSTM revealed as the most robust architecture. Third, UK liquid biofuel consumption trends are analyzed using multiple forecasting methods, including Mean, Naïve, Seasonal Naïve, Drift, and machine learning models. It is shown that the neural network autoregressive (NNAR) model has the highest forecast accuracy, and among the combined forecast models, constrained least squares achieved the highest forecast accuracy. The results indicate that renewable energy produces lower risk exposure and more stable returns, and improves predictability despite short-term volatility.
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