ENERGY FORCASTING METHODS

• The scenario approach has been widely used in climate change and energy efficiency policy making (Ghanadan and Koomey, 2005).

• In the energy and climate change area, the use of scenarios by the Intergovernmental Panel of Climate Change (IPCC) has played an important role in the policy debate.

• Scenarios are an integral part of the end-use approach as well and accordingly, they are not new to energy analysis.

• “A scenario is a story that describes a possible future” (Shell, 2003). In simple terms, scenarios refer to a “set of illustrative pathways” that indicate how “the future may unfold” (Ghanadan and Koomey, 2005).

• Evidently, they do not try to capture all possible eventualities but try to indicate how things could evolve. It is a particularly suitable approach in a changing and uncertain world.

• “Scenarios give the analyst the opportunity to highlight different combinations of various influences, so that alternative future contexts can be sketched out, and the energy implications examined”

• “Scenarios are based on intuition, but crafted as analytical structures…They do not provide a consensus view of the future, nor are they predictions” (Shell, 2003).

• Clearly, “scenarios are distinct from forecasts in that they explore a range of possible outcomesresulting from uncertainty; in contrast, forecasts aim to identify the most likely pathway and estimate uncertainties” (Ghanadan and Koomey, 2005).

• The strength of the scenario approach is its ability to capture structural changes explicitly by considering sudden or abrupt changes in the development paths.

• The actual level of disaggregation and inclusion of traditional energies and informal sector activities depend on model implementation.

• Theoretically it is possible to include these aspects but how much is actually done in reality cannot be generalized.

• Moreover, the development of plausible scenarios that could capture structural changes, emergence of new economic activities or disappearance of activities is not an easy task.