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Electricity Demand Analysis Using Cointegration and ARIMA Modelling: A case study of Turkey

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  • Erdogdu, Erkan

Abstract

In the early 2000s, the Republic of Turkey has initiated an ambitious reform program in her electricity market, which requires privatization, liberalization as well as a radical restructuring. The most controversial reason behind, or justification for, recent reforms has been the rapid electricity demand growth; that is to say, the whole reform process has been a part of the endeavors to avoid the so-called “energy crisis”. Using cointegration analysis and autoregressive integrated moving average (ARIMA) modelling, the present article focuses on this issue by both providing an electricity demand estimation and forecast, and comparing the results with official projections. The study concludes, first, that consumers’ respond to price and income changes is quite limited and therefore there is a need for economic regulation in Turkish electricity market; and second, that the current official electricity demand projections highly overestimate the electricity demand, which may endanger the development of both a coherent energy policy in general and a healthy electricity market in particular.

Suggested Citation

  • Erdogdu, Erkan, 2007. "Electricity Demand Analysis Using Cointegration and ARIMA Modelling: A case study of Turkey," MPRA Paper 19099, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:19099
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    More about this item

    Keywords

    Turkish electricity demand; Cointegration; ARIMA modelling;
    All these keywords.

    JEL classification:

    • Q47 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy Forecasting
    • Q4 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy

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