Abstract
Due to the growing electricity consumption in Iran, investigating the changes of the electricity demand is one of the fundamental challenges facing many professionals and planners. The planners always invest efforts to address this issue by accurately predicting the electricity demand over the years and increasing the extra capacity respectively. One of the main tools for predicting the electricity demand is a regression model. Generally, in the papers, to estimate the annual electricity demand, the electricity prices and GDP per capita have been considered as independent variables. In this study, we used the data pertinent to the electricity prices, GDP per capita and investment per capita from 1974 to 2007, to estimate the annual electricity demand. In our estimated model, price elasticity, income elasticity and investment elasticity were 0.187, -0.566 and 1.207 respectively. The annual demand for the electricity for years 2008 and 2009 was predicted. The low error rate between the actual values and the predicted values shows that this model is an acceptable model
Highlights
Electricity as a form of energy is a backbone of any country’s economy
Technical issues such as mitigation of the power (Hamidi and Kiany, 2019), transformers (Khan et al, 2018; 2017) and overestimation or underestimation of power (Karimi and Natarajan, 2020) will makes huge cost in energy network. Concerning such a tendency, there are some questions which have been overlooked and need more investigation: (a) What is the expected demand for the electricity? (b) What factors influence electricity consumption? And to what extent? and (c) what policy needs to be employed to decrease the consumption of electricity? Answering to these questions require understanding the mechanism of electricity consumption and electricity demand of the country
The results indicated that energy demand was inelastic with respect to changes in the explanatory variables, but in terms of absolute value, the price elasticity was less than the income elasticity (Attar, 2000)
Summary
Electricity as a form of energy is a backbone of any country’s economy. Energy itself is not a consumer demand. Using electricity in the energy cycle for various reasons (e.g., cleanness), its simple conversion to energy and its use in electrical appliances are the factors increase the tendency for the electricity consumption (Hosseinalizadeh et al, 2016; 2017; Zahraee et al, 2020) Technical issues such as mitigation of the power (Hamidi and Kiany, 2019), transformers (Khan et al, 2018; 2017) and overestimation or underestimation of power (Karimi and Natarajan, 2020) will makes huge cost in energy network. In the microeconomic theory, Electricity demand is influenced by two main factors, price and income. The results of the studies conducted in this area used for developing the infrastructure of energy planning and energy policy making.
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