IDEAS home Printed from https://ideas.repec.org/a/eee/energy/v44y2012i1p367-380.html
   My bibliography  Save this article

Conditional dynamic forecast of electrical energy consumption requirements in Ghana by 2020: A comparison of ARDL and PAM

Author

Listed:
  • Adom, Philip Kofi
  • Bekoe, William

Abstract

The frequent power outages which characterises Ghana's electricity sector have raised serious concerns among policy makers and stakeholders. The causes of this problem have been cited as growing demand and inadequate investment. The objective of this study, therefore, was to identify the factors that affect aggregate electricity demand in Ghana both in the short and long-run as a guide for demand-side management based on two econometric approaches-ARDL and PAM. Also predictions of aggregate electricity demand based on these econometric methods were obtained to guide investment decisions in the electricity sector. The result revealed that the positive output, urbanisation, and income effects more than offset the negative efficiency effects leading to growth in electricity consumption both in the short-run and long-run. The result further establishes the superiority of the ARDL approach to forecasting over the Partial adjustment approach to forecasting. For all three scenarios, future domestic consumption levels of electrical energy are predicted to increase ad infinitum from 2012 to 2020. Specifically electricity demand is estimated to fall within 20,453 and 34,867 GWh by the year 2020 for all three scenarios. This requires huge capital investments in additional plant capacity.

Suggested Citation

  • Adom, Philip Kofi & Bekoe, William, 2012. "Conditional dynamic forecast of electrical energy consumption requirements in Ghana by 2020: A comparison of ARDL and PAM," Energy, Elsevier, vol. 44(1), pages 367-380.
    • Handle: RePEc:eee:energy:v:44:y:2012:i:1:p:367-380
    DOI: 10.1016/j.energy.2012.06.020
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0360544212004719
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.energy.2012.06.020?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Hunt, Lester C. & Judge, Guy & Ninomiya, Yasushi, 2003. "Underlying trends and seasonality in UK energy demand: a sectoral analysis," Energy Economics, Elsevier, vol. 25(1), pages 93-118, January.
    2. Al-Ghandoor, A. & Al-Hinti, I. & Jaber, J.O. & Sawalha, S.A., 2008. "Electricity consumption and associated GHG emissions of the Jordanian industrial sector: Empirical analysis and future projection," Energy Policy, Elsevier, vol. 36(1), pages 258-267, January.
    3. Rao, Raghavendra D & Parikh, Jyoti K, 1996. "Forecast and analysis of demand for petroleum products in India," Energy Policy, Elsevier, vol. 24(6), pages 583-592, June.
    4. Rout, Ullash K. & Voβ, Alfred & Singh, Anoop & Fahl, Ulrich & Blesl, Markus & Ó Gallachóir, Brian P., 2011. "Energy and emissions forecast of China over a long-time horizon," Energy, Elsevier, vol. 36(1), pages 1-11.
    5. M. Hashem Pesaran & Yongcheol Shin & Richard J. Smith, 2001. "Bounds testing approaches to the analysis of level relationships," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 16(3), pages 289-326.
    6. Suganthi, L. & Samuel, Anand A., 2012. "Energy models for demand forecasting—A review," Renewable and Sustainable Energy Reviews, Elsevier, vol. 16(2), pages 1223-1240.
    7. L. Suganthi & T.R. Jagadeesan, 1992. "A Modified Model for Prediction of India's Future Energy Requirement," Energy & Environment, , vol. 3(4), pages 371-386, June.
    8. Pilli-Sihvola, Karoliina & Aatola, Piia & Ollikainen, Markku & Tuomenvirta, Heikki, 2010. "Climate change and electricity consumption--Witnessing increasing or decreasing use and costs?," Energy Policy, Elsevier, vol. 38(5), pages 2409-2419, May.
    9. Tunc, Murat & Camdali, Unal & Parmaksizoglu, Cem, 2006. "Comparison of Turkey's electrical energy consumption and production with some European countries and optimization of future electrical power supply investments in Turkey," Energy Policy, Elsevier, vol. 34(1), pages 50-59, January.
    10. Arsenault, E. & Bernard, J. -T. & Carr, C. W. & Genest-Laplante, E., 1995. "A total energy demand model of Quebec : Forecasting properties," Energy Economics, Elsevier, vol. 17(2), pages 163-171, April.
    11. Hunt, Lester C. & Ninomiya, Yasushi, 2005. "Primary energy demand in Japan: an empirical analysis of long-term trends and future CO2 emissions," Energy Policy, Elsevier, vol. 33(11), pages 1409-1424, July.
    12. Erdogdu, Erkan, 2007. "Electricity demand analysis using cointegration and ARIMA modelling: A case study of Turkey," Energy Policy, Elsevier, vol. 35(2), pages 1129-1146, February.
    13. Koli Fatai & Les Oxley & Frank G. Scrimgeour, 2003. "Modeling and Forecasting the Demand for Electricity in New Zealand: A Comparison of Alternative Approaches," The Energy Journal, International Association for Energy Economics, vol. 0(Number 1), pages 75-102.
    14. De Vita, G. & Endresen, K. & Hunt, L.C., 2006. "An empirical analysis of energy demand in Namibia," Energy Policy, Elsevier, vol. 34(18), pages 3447-3463, December.
    15. Bose, Ranjan Kumar & Shukla, Megha, 1999. "Elasticities of electricity demand in India," Energy Policy, Elsevier, vol. 27(3), pages 137-146, March.
    16. Inglesi-Lotz, Roula & Blignaut, James N., 2011. "South Africa’s electricity consumption: A sectoral decomposition analysis," Applied Energy, Elsevier, vol. 88(12), pages 4779-4784.
    17. Dilaver, Zafer & Hunt, Lester C., 2011. "Turkish aggregate electricity demand: An outlook to 2020," Energy, Elsevier, vol. 36(11), pages 6686-6696.
    18. Adom, Philip Kofi & Bekoe, William & Akoena, Sesi Kutri Komla, 2012. "Modelling aggregate domestic electricity demand in Ghana: An autoregressive distributed lag bounds cointegration approach," Energy Policy, Elsevier, vol. 42(C), pages 530-537.
    19. Islas, Jorge & Manzini, Fabio & Masera, Omar, 2007. "A prospective study of bioenergy use in Mexico," Energy, Elsevier, vol. 32(12), pages 2306-2320.
    20. Liu, Yaobin, 2009. "Exploring the relationship between urbanization and energy consumption in China using ARDL (autoregressive distributed lag) and FDM (factor decomposition model)," Energy, Elsevier, vol. 34(11), pages 1846-1854.
    21. Gielen, Dolf & Changhong, Chen, 2001. "The CO2 emission reduction benefits of Chinese energy policies and environmental policies:: A case study for Shanghai, period 1995-2020," Ecological Economics, Elsevier, vol. 39(2), pages 257-270, November.
    22. Jiang, BinBin & Wenying, Chen & Yuefeng, Yu & Lemin, Zeng & Victor, David, 2008. "The future of natural gas consumption in Beijing, Guangdong and Shanghai: An assessment utilizing MARKAL," Energy Policy, Elsevier, vol. 36(9), pages 3286-3299, September.
    23. Paul Adjei Kwakwa, 2012. "Disaggregated Energy Consumption and Economic Growth in Ghana," International Journal of Energy Economics and Policy, Econjournals, vol. 2(1), pages 34-40.
    24. Imhotep P. Alagidede & Tamara E. Mughogho, 2019. "Capital Account Liberalization and Capital Flows to Sub-Saharan Africa: A Panel Threshold Approach," Working Papers 203, Economic Research Southern Africa.
    25. Suganthi, L. & Williams, A., 2000. "Renewable energy in India -- a modelling study for 2020-2021," Energy Policy, Elsevier, vol. 28(15), pages 1095-1109, December.
    26. Inglesi, Roula, 2010. "Aggregate electricity demand in South Africa: Conditional forecasts to 2030," Applied Energy, Elsevier, vol. 87(1), pages 197-204, January.
    27. Intarapravich, Duangjai & Johnson, Charles J. & Li, Binsheng & Long, Scott & Pezeshki, Shiva & Prawiraatmadja, Widhyawan & Tang, Frank C. & Wu, Kang, 1996. "3. Asia-Pacific energy supply and demand to 2010," Energy, Elsevier, vol. 21(11), pages 1017-1039.
    28. Changhong, Chen & Bingyan, Wang & Qingyan, Fu & Green, Collin & Streets, David G., 2006. "Reductions in emissions of local air pollutants and co-benefits of Chinese energy policy: a Shanghai case study," Energy Policy, Elsevier, vol. 34(6), pages 754-762, April.
    29. Pradhan, Shreekar & Ale, Bhakta Bahadur & Amatya, Vishwa Bhusan, 2006. "Mitigation potential of greenhouse gas emission and implications on fuel consumption due to clean energy vehicles as public passenger transport in Kathmandu Valley of Nepal: A case study of trolley bu," Energy, Elsevier, vol. 31(12), pages 1748-1760.
    30. Philip Kofi Adom, 2011. "Electricity Consumption-Economic Growth Nexus: The Ghanaian Case," International Journal of Energy Economics and Policy, Econjournals, vol. 1(1), pages 18-31, June.
    31. Iniyan, S. & Suganthi, L. & Samuel, Anand A., 2006. "Energy models for commercial energy prediction and substitution of renewable energy sources," Energy Policy, Elsevier, vol. 34(17), pages 2640-2653, November.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Suganthi, L. & Samuel, Anand A., 2012. "Energy models for demand forecasting—A review," Renewable and Sustainable Energy Reviews, Elsevier, vol. 16(2), pages 1223-1240.
    2. Debnath, Kumar Biswajit & Mourshed, Monjur, 2018. "Forecasting methods in energy planning models," Renewable and Sustainable Energy Reviews, Elsevier, vol. 88(C), pages 297-325.
    3. Gholami, M. & Barbaresi, A. & Torreggiani, D. & Tassinari, P., 2020. "Upscaling of spatial energy planning, phases, methods, and techniques: A systematic review through meta-analysis," Renewable and Sustainable Energy Reviews, Elsevier, vol. 132(C).
    4. Adom, Philip Kofi & Bekoe, William, 2013. "Modelling electricity demand in Ghana revisited: The role of policy regime changes," Energy Policy, Elsevier, vol. 61(C), pages 42-50.
    5. Paul Adjei Kwakwa & Solomon Aboagye, 2014. "Energy consumption in Ghana and the story of economic growth, industrialization, trade openness and urbanization," Asian Bulletin of Energy Economics and Technology, Asian Online Journal Publishing Group, vol. 1(1), pages 1-6.
    6. Adom, Philip Kofi & Bekoe, William & Akoena, Sesi Kutri Komla, 2012. "Modelling aggregate domestic electricity demand in Ghana: An autoregressive distributed lag bounds cointegration approach," Energy Policy, Elsevier, vol. 42(C), pages 530-537.
    7. Reza Hafezi & Amir Naser Akhavan & Mazdak Zamani & Saeed Pakseresht & Shahaboddin Shamshirband, 2019. "Developing a Data Mining Based Model to Extract Predictor Factors in Energy Systems: Application of Global Natural Gas Demand," Energies, MDPI, vol. 12(21), pages 1-22, October.
    8. Keho, Yaya, 2016. "What drives energy consumption in developing countries? The experience of selected African countries," Energy Policy, Elsevier, vol. 91(C), pages 233-246.
    9. Solarin, Sakiru Adebola & Shahbaz, Muhammad, 2013. "Trivariate causality between economic growth, urbanisation and electricity consumption in Angola: Cointegration and causality analysis," Energy Policy, Elsevier, vol. 60(C), pages 876-884.
    10. Laha, Priyanka & Chakraborty, Basab, 2017. "Energy model – A tool for preventing energy dysfunction," Renewable and Sustainable Energy Reviews, Elsevier, vol. 73(C), pages 95-114.
    11. Al-Bajjali, Saif Kayed & Shamayleh, Adel Yacoub, 2018. "Estimating the determinants of electricity consumption in Jordan," Energy, Elsevier, vol. 147(C), pages 1311-1320.
    12. Yong Zeng & Yanpeng Cai & Guohe Huang & Jing Dai, 2011. "A Review on Optimization Modeling of Energy Systems Planning and GHG Emission Mitigation under Uncertainty," Energies, MDPI, vol. 4(10), pages 1-33, October.
    13. Mensah, Justice Tei & Marbuah, George & Amoah, Anthony, 2016. "Energy demand in Ghana: A disaggregated analysis," Renewable and Sustainable Energy Reviews, Elsevier, vol. 53(C), pages 924-935.
    14. Salisu, Afees A. & Ayinde, Taofeek O., 2016. "Modeling energy demand: Some emerging issues," Renewable and Sustainable Energy Reviews, Elsevier, vol. 54(C), pages 1470-1480.
    15. Ackah, Ishmael, 2015. "On the relationship between energy consumption, productivity and economic growth: Evidence from Algeria, Ghana, Nigeria and South Africa," MPRA Paper 64887, University Library of Munich, Germany.
    16. Daniel Morais de Souza & Rogerio Silva de Mattos & Alexandre Zanini, 2022. "Estimating Elasticities for the Residential Demand of Electricity in Brazil Using Cointegration Models," International Journal of Energy Economics and Policy, Econjournals, vol. 12(2), pages 315-324, March.
    17. Tiwari, Aviral Kumar & Menegaki, Angeliki N., 2019. "A time varying approach on the price elasticity of electricity in India during 1975–2013," Energy, Elsevier, vol. 183(C), pages 385-397.
    18. Roula Inglesi-Lotz, 2012. "The sensitivity of the South African industrial sector’s electricity consumption to electricity price fluctuations," Working Papers 201225, University of Pretoria, Department of Economics.
    19. Adewuyi, Adeolu O., 2016. "Determinants of import demand for non-renewable energy (petroleum) products: Empirical evidence from Nigeria," Energy Policy, Elsevier, vol. 95(C), pages 73-93.
    20. Halicioglu, Ferda, 2007. "Residential electricity demand dynamics in Turkey," Energy Economics, Elsevier, vol. 29(2), pages 199-210, March.

    More about this item

    Keywords

    Electricity demand; Conditional forecast; ARDL; PAM; Ghana;
    All these keywords.

    JEL classification:

    • Q40 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - General
    • Q41 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Demand and Supply; Prices
    • Q43 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy and the Macroeconomy
    • Q47 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy Forecasting

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:energy:v:44:y:2012:i:1:p:367-380. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.journals.elsevier.com/energy .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.