Optimal modeling and forecasting of the energy consumption and production in China

Abstract

Energy is of fundamental importance to a nation's economy. Accurate prediction of the energy consumption and production in China can play a guiding role in making the energy consumption plan, and facilitate timely and effective decision making of energy policy. This article proposes a novel GM (gray model) (1,1) model based on optimizing initial condition according to the principle of new information priority. The optimized model and five other GM (1,1) models are applied in the modeling of China's energy consumption and production. Both the simulation and prediction accuracy of the models are compared and analyzed. We obtain the result that the optimized model has higher prediction accuracy than the other five models. Therefore, the presented optimized model is further utilized to predict China's energy consumption and production from 2013 to 2017. The result indicates that China's energy consumption and production will keep increasing and the gap between the energy production and consumption will also be increasing. Finally, we predict Iran's and Argentina's energy consumption to further prove the effectiveness of the proposed model.