Energy Demand Models for Policy Formulation: A Comparative Study of Energy Demand Models

151 Pages Posted: 20 Apr 2016

See all articles by Subhes C. Bhattacharyya

Subhes C. Bhattacharyya

IESD, De Montfort University; University of Dundee

Govinda R. Timilsina

World Bank - Development Research Group (DECRG)

Date Written: March 1, 2009

Abstract

This paper critically reviews existing energy demand forecasting methodologies highlighting the methodological diversities and developments over the past four decades in order to investigate whether the existing energy demand models are appropriate for capturing the specific features of developing countries. The study finds that two types of approaches, econometric and end-use accounting, are used in the existing energy demand models. Although energy demand models have greatly evolved since the early 1970s, key issues such as the poor-rich and urban-rural divides, traditional energy resources, and differentiation between commercial and non-commercial energy commodities are often poorly reflected in these models. While the end-use energy accounting models with detailed sector representations produce more realistic projections compared with the econometric models, they still suffer from huge data deficiencies especially in developing countries. Development and maintenance of more detailed energy databases, further development of models to better reflect developing country context, and institutionalizing the modeling capacity in developing countries are the key requirements for energy demand modeling to deliver richer and more reliable input to policy formulation in developing countries.

Keywords: Energy Production and Transportation, Energy Demand, Environment and Energy Efficiency, Energy and Environment, Economic Theory & Research

Suggested Citation

Bhattacharyya, Subhes C. and Timilsina, Govinda R., Energy Demand Models for Policy Formulation: A Comparative Study of Energy Demand Models (March 1, 2009). World Bank Policy Research Working Paper Series, Vol. , pp. -, 2009. Available at SSRN: https://ssrn.com/abstract=1368072

Subhes C. Bhattacharyya (Contact Author)

IESD, De Montfort University ( email )

The Gateway
Leicester, LE1 9BH
United Kingdom

University of Dundee ( email )

Dundee, Scotland DD1 4HN
United Kingdom

Govinda R. Timilsina

World Bank - Development Research Group (DECRG) ( email )

1818 H Street NW
MSN3-311
Washington, DC 20433
United States

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