Energy Demand Forecasting in Economies in Transition

Abstract

Countries in transition from centrally planned to free market economies face many fundamental transformations both in their economies and energy sectors. Deep economic decline is accompanied by a similar reduction in energy consumption. This paper considers the current situation in the Lithuanian economy, its development since 1990 and future outlook, and provides an analysis of changes in primary and final energy consumption as well as changes in energy intensity. It provides a comparison of the main indicators of energy consumption in Lithuania to those in other countries, such as primary energy per capita and the ratio of primary energy and final energy to Gross Domestic Product based on estimates of Purchasing Power Parity and electricity consumption per capita. Analysis of real trends of energy consumption by applying mathematical modeling, mathematical statistics and economics is rather complicated for countries in undergoing this kind of transition. Therefore the paper describes a methodology of energy demand forecasting based on the application of econometric and simulation models as well as on the comparative analysis of various indicators. The paper also presents forecasts of final energy and electricity demand in Lithuania through 2025.