Forecasting Clean Energy Consumption in China by 2025: Using Improved Grey Model GM (1, N)

Maolin Cheng, Jiano Li, Yun Liu and Bin Liu
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Maolin Cheng: Department of Statistics, Suzhou University of Science and Technology, Suzhou 215009, China
Jiano Li: Department of Statistics, Suzhou University of Science and Technology, Suzhou 215009, China
Yun Liu: Department of Statistics, Suzhou University of Science and Technology, Suzhou 215009, China
Bin Liu: Department of Finance, Suzhou University of Science and Technology, Suzhou 215009, China

Sustainability, 2020, vol. 12, issue 2, 1-20

Abstract: Forecasting China’s clean energy consumption has great significance for China in making sustainably economic development strategies. Because the main factors affecting China’s clean energy consumption are economic scale and population size, and there are three variables in total, this paper tries to simulate and forecast China’s clean energy consumption using the grey model GM (1, 3). However, the conventional grey GM (1, N) model has great simulation and forecasting errors, the main reason for which is the structural inconsistency between the grey differential equation for parameter estimation and the whitening equation for forecasting. In this case, this paper improves the conventional model and provides an improved model GM (1, N). The modeling results show that the improved grey model GM (1, N) built with the method proposed improves simulation and forecasting precision greatly compared with conventional models. To compare the model with other forecasting models, this paper builds a grey GM (1, 1) model, a regression model and a difference equation model. The comparison results show that the improved grey model GM (1, N) built with the method proposed shows simulation and forecasting precision superior to that of other models as a whole. In the final section, the paper forecasts China’s clean energy consumption from 2019 to 2025 using the improved grey model GM (1, N). The forecasting results show that, by 2025, China’s clean energy consumption shall reach the equivalent of 1.504976082 billion tons of standard coal. From 2019 to 2025, clean energy consumption shall increase by 11.32% annually on average, far above the economic growth rate, indicating China’s economic growth shall have a great demand for clean energy in the future. Studies have shown that China’s clean energy consumption shall increase rapidly with economic growth and population increase in the next few years.

Keywords: clean energy consumption; grey model; time response equation; forecasting precision (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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