Time series models (Grey-Markov, Grey Model with rolling mechanism and singular spectrum analysis) to forecast energy consumption in India

The present study applies three time series models, namely, Grey-Markov model, Grey-Model with rolling mechanism, and singular spectrum analysis (SSA) to forecast the consumption of conventional energy in India. Grey-Markov model has been employed to forecast crude-petroleum consumption while Grey-Model with rolling mechanism to forecast coal, electricity (in utilities) consumption and SSA to predict natural gas consumption. The models for each time series has been selected by carefully examining the structure of the individual time series. The mean absolute percentage errors (MAPE) for two out of sample forecasts have been obtained as follows: 1.6% for crude-petroleum, 3.5% for coal, 3.4% for electricity and 3.4% for natural gas consumption. For two out of sample forecasts, the prediction accuracy for coal consumption was 97.9%, 95.4% while for electricity consumption the prediction accuracy was 96.9%, 95.1%. Similarly, the prediction accuracy for crude-petroleum consumption was found to be 99.2%, 97.6% while for natural gas consumption these values were 98.6%, 94.5%. The results obtained have also been compared with those of Planning Commission of India's projection. The comparison clearly points to the enormous potential that these time series models possess in energy consumption forecasting and can be considered as a viable alternative.