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Forecasting electricity consumption in Pakistan: the way forward

Author

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  • Hussain, Anwar
  • Rahman, Muhammad
  • Memon, Junaid Alam

Abstract

Growing shortfall of electricity in Pakistan affects almost all sectors of its economy. For proper policy formulation, it is imperative to have reliable forecasts of electricity consumption. This paper applies Holt-Winter and Autoregressive Integrated Moving Average (ARIMA) models on time series secondary data from 1980 to 2011 to forecast total and component wise electricity consumption in Pakistan. Results reveal that Holt-Winter is the appropriate model for forecasting electricity consumption in Pakistan. It also suggests that electricity consumption would continue to increase throughout the projected period and widen the consumption-production gap in case of failure to respond the issue appropriately. It further reveals that demand would be highest in the household sector as compared to all other sectors and the increase in the energy generation would be less than the increase in total electricity consumption throughout the projected period. The study discuss various options to reduce the demand-supply gap and provide reliable electricity to different sectors of the economy.

Suggested Citation

  • Hussain, Anwar & Rahman, Muhammad & Memon, Junaid Alam, 2016. "Forecasting electricity consumption in Pakistan: the way forward," Energy Policy, Elsevier, vol. 90(C), pages 73-80.
    • Handle: RePEc:eee:enepol:v:90:y:2016:i:c:p:73-80
    DOI: 10.1016/j.enpol.2015.11.028
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    More about this item

    Keywords

    Projections; Energy; Forecasting model; Forecast evaluation; Sectorial energy consumption;
    All these keywords.

    JEL classification:

    • C53 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Forecasting and Prediction Models; Simulation Methods
    • E27 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Forecasting and Simulation: Models and Applications
    • 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

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