This dissertation was written as a part of the MSc in Energy and Finance. The main aims of this study can be summarized as follows: a) to analyze the causal relationship be-tween Turkish net electricity consumption and the GDP of the country, b) to forecast net energy consumption of Turkey for the next decade by using two appropriate Auto-regressive Integrated Moving Average (ARIMA) models. The findings of this research indicate that there exists a significant unidirectional causality from GDP to electricity consumption, and both series are cointegrated. The estimated long-run income elasticity of demand for electricity in Turkey is found very high, i.e., 1,106. The results also indi-cate that the forecasts of the ARIMA(3,2,2) model are very close to the official con-sumption projections made by The Ministry of Energy and Natural Resources. Moreo-ver, the ARIMA(13,2,0) model performance is superior to the ARIMA(3,2,2) model’s one. It is predicted that net electricity consumption of Turkey in 2028 will be some-where between 359.315 GWh and 367.553 GWh, which corresponds to a minimum 40% increase within ten years.
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