Energy demand estimation of South Korea using artificial neural network

Zong Woo Geem and William E. Roper

Energy Policy, 2009, vol. 37, issue 10, 4049-4054

Abstract: Because South Korea's industries depend heavily on imported energy sources (fifth largest importer of oil and second largest importer of liquefied natural gas in the world), the accurate estimating of its energy demand is critical in energy policy-making. This research proposes an artificial neural network model (a structure with feed-forward multilayer perceptron, error back-propagation algorithm, momentum process, and scaled data) to efficiently estimate the energy demand for South Korea. The model has four independent variables, such as gross domestic product (GDP), population, import, and export amounts. The data are obtained from diverse local and international sources. The proposed model better estimated energy demand than a linear regression model (a structure with multiple linear variables and least square method) or an exponential model (a structure with mixed integer variables, branch and bound method, and Broyden-Fletcher-Goldfarb-Shanno (BFGS) method) in terms of root mean squared error (RMSE). The model also forecasted better than the other two models in terms of RMSE without any over-fitting problem. Further testing with four scenarios based upon reliable source data showed unanticipated results. Instead of growing permanently, the energy demands peaked at certain points, and then decreased gradually. This trend is quite different from the results by regression or exponential model.

Keywords: Energy; demand; Artificial; neural; network; South; Korea (search for similar items in EconPapers)
Date: 2009
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Citations: View citations in EconPapers (50)

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