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About correlations and stochasticity

ยท One min read

Typically a spreadsheet will not include any model of randomness โ€“ in other words, it is deterministic. In reinforcement learning it can be straightforward to include randomness, and this is one of the strengths of RL.

We will leave the choice between deterministic (without randomness) and stochastic (with randomness) modelling for another blog post. The interesting point for us this week was correlations: how we describe the extent to which random factors tend to move together. In deterministic modelling there is simply no need to think about how, for example, the prices of natural gas price and blue hydrogen (which is derived from natural gas) move together. In contrast, in stochastic modelling different correlations could even drive different solutions. Fortunately, in this project we have the luxury of discussions with some of the creators of the Integrated Energy Vision (the spreadsheet model on which the challenge is based), so correlations can be chosen in an informed way.