Reality Checks for Power Forecasts: Two Simple Checks Relating Power Sector Demand Forecasts to the Macroeconomy
Author: Robert Bacon Date: 6/1/1994 (PDF, 200KB)
In some of the poorer countries now starting to look at large power projects, the information on past power demand patterns is not good enough to make reliable demand forecasts. Forecasters often end up simply projecting current growth rates. But this can produce forecasts that are inconsistent with macroeconomic developments--such as the real price rises that occur when governments remove subsidies. Robert Bacon outlines two simple reality checks to help prevent forecast error.