Abstract
Traditional method of forecasting electricity consumption based only on GDP was sometimes ineffective. In this paper, urbanisation rate (UR) was introduced as an additional predictor to improve the electricity demand forecast in China at provincial scale, which was previously based only on GDP. Historical data of Shaanxi province from 2000 to 2013 was collected and used as case study. Four regression models were proposed and GDP, UR, and electricity consumption (EC) were used to establish the parameters in each model. The model with least average error of hypothetical forecast results in the latest three years was selected as the optimal forecast model. This optimal model divides total EC into four parts, of which forecasts can be made separately. It was found that GDP was only better correlated than UR on household EC, whilst UR was better on the three sectors of industries. It was concluded that UR is a valid predictor to forecast electricity demand at provincial level in China nowadays. Being provided the planned value of GDP and UR from the government, EC in 2015 were forecasted as 131.3 GWh.
Highlights
The consumption of electricity is largely related to the economic development, industrialisation, and urbanisation process in China for the past two decades
The aim of this paper is to investigate to what extent urbanisation rate can be used as a parameter along with GDP, to provide better forecast on electricity demand in China at provincial scale
A residual means the difference between an observed value and the fitted value provided by the specific model
Summary
The consumption of electricity is largely related to the economic development, industrialisation, and urbanisation process in China for the past two decades. It is crucial for the local or provincial governments as well as electricity providers to forecast the demand of electricity in order to achieve better installation planning and administration. The electricity consumption is likewise regarded as part of the economic development index system [1] The rationale behind this practical approach is little more than the high correlation between electricity demand and GDP, regardless of the disagreement among past studies on their causality in academia [2,3,4,5,6]. Urbanisation rate refers to the percentage of the population living in urban
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