FORECASTING RESIDENTIAL ELECTRICITY CONSUMPTION IN BRAZIL: APPLICATION OF THE ARX MODEL
DOI:
https://doi.org/10.24023/FutureJournal/2175-5825/2010.v2i2.50Abstract
This work aims to propose the application of the ARX model to forecast residential electricity consumption in Brazil. Such estimates are critical for decision making in the energy sector, from a technical, economic and environmentally sustainable standpoint. The demand for electricity follows a multiplicative model based on economic theory and involves four explanatory variables: the cost of residential electricity, the actual average income, the inflation of domestic utilities and the electricity consumption. The coefficients of the electricity consumption equation were determined using the ARX model, which considers the influence of exogenous variables to estimate the dependent variable and employs an autoregression process for residual modeling to improve the explanatory power. The resulting model has a determination coefficient of 95.4 percent and all estimated coefficients were significant at the 0.10 descriptive level. Residential electricity consumption estimates were also determined for January and February 2010 within the 95 percent confidence interval, which included the actual consumption figures observed. The proposed model has been shown to be useful for estimating residential electricity consumption in Brazil.
Key-words: Time series. Electricity consumption. ARX modeling.
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