The Study of the Impact of Value Added of the Industrial Sector on Electricity Demand and Forecast of Demand for Electricity in Industrial Sector with Attention to Price Reforms

Given the importance of electrical energy as one of the main factors behind economic growth and development, numerous studies in different countries have been devoted to estimation and forecasting of electricity demand. In this paper, ARDL technique is used to estimate and forecast electricity demand in the industrial sector. The results indicate that the value added of the industrial sector has a significant positive impact on the demand for electricity in this sector. The income elasticity in industrial sector is found to be less than unity, which shows electricity to be a necessary commodity.
The results indicate the existence of a long-term relationship between the variables in this industry. In this article, based on amendments to the law on subsidies and obtained cost estimates, forecast of electricity demand was carried out until the end of the Fifth Development Plan; and the results point to an increase in power consumption in the industry. At the end, fundamental changes in the structure of industry to improve technology and equipment in various industries have been proposed. In this regard, government should develop standards for equipment efficiency and monitor its implementation carefully.