Incorporating economic and demographic variablesfor forecasting electricity consumption in Pakistan

Precise electricity demand forecasting is necessary for power sector planning. Electricity consumption is typically governed by variation in severaleconomic and demographic variables including population, GDP and income per capita. In this study, relationship has been investigated between electrical power demand and the selected independent variables through correlation matrix. Univariate time series and econometric models have been developed to estimate electrical power demand for next fifteen years in Pakistan. Influence of chosen variables on electricity consumption has been employed for demand forecasting through multiple linear regression model. Validity of proposed model has been tested and results from both models are compared. This research would provide a quantitative analysis in order to support strategic planning and policy making for power sector from medium to long time frame.