Modelling and forecasting energy consumption in INDIA: Influence of socioeconomic variables

ABSTRACT

Energy is found to be a vital input for the economic growth of any nation. In India, which is a developing country, energy is found to be one of the major drivers of economic development. Review indicates energy consumption is linked to socioeconomic variables like GNP, price of energy, and population. In this article, econometric models are developed to study the influence of the socioeconomic variables on energy consumption. The best fit is determined using R², SE, and Durbin Watson (DW) statistic. ‘t’ test is conducted to find the significant variables influencing energy demand. It is found that coal price and population influence the demand for coal, whereas GNP per capita influences the demand for oil. Electricity demand is dependent on the GNP and electricity price. The coal, oil, natural gas, and electricity requirement for India during 2030–2031 is forecasted and the total energy requirement is found to be 22.944 × 10¹⁵ kJ.

KEYWORDS:

• Demand forecasting
• econometric model
• energy economics
• Energy modeling
• energy planning