Renewable Energy 154 (2020) 1e10

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Renewable Energy
journal homepage: www.elsevier.com/locate/renene

Hydroelectricity consumption forecast for Pakistan using ARIMA

modeling and supply-demand analysis for the year 2030
Rehan Jamil
Department of Building Engineering, College of Architecture & Planning, Imam Abdulrahman Bin Faisal University, P. O. Box 1982, Dammam, 31441, Saudi
Arabia

a r t i c l e i n f o a b s t r a c t

Article history: The amount of electricity generation and its availability to the residents of a country reflects its level of
Received 26 April 2019 development and economic condition. Water being one of the cheapest and renewable sources of energy,
Received in revised form is being used to produce one-quarter of the total electricity production in Pakistan. This article presents a
12 February 2020
forecasting study of hydroelectricity consumption in Pakistan based on the historical data of past 53
Accepted 28 February 2020
Available online 4 March 2020
years using Auto-Regressive Integrated Moving-Average (ARIMA) modeling. Based on the developed
forecasting equation, the hydroelectricity consumption was predicted up to the year 2030. For validating
the reliability of the forecasted data, the results were compared to the actual values which showed good
Keywords:
Hydroelectricity consumption
fit with minimum deviation. The forecasted values of hydroelectricity consumption revealed an average
ARIMA model annual increment of 1.65% with a cumulative increase of 23.4% up to the year 2030. The results were
Time series forecasting compared with the hydroelectricity generation plans of the Government of Pakistan for its effectiveness.
Hydropower A sensitivity analysis was also performed to study the relation of hydroelectricity consumption to the
Renewable energy annual population and GDP growth rate of the country. The research shall significantly prove to be useful
Pakistan in better planning and management of water resources of Pakistan for future.
© 2020 Elsevier Ltd. All rights reserved.

1. Introduction having the steep topography, constitutes the major hydroelectricity

Electricity production is the essential part of a country’s eco-
nomic development and growth which further affects the various
social issues including environment, standard of living of people
and overall society, either in a positive or negative way which is
based on the volume of electricity production as compared to its
consumption.
Pakistan is a beautiful country located in South of Asia and
contains varying geographical features including rivers, deserts all
over its land. Geographically Pakistan can be divided into three
major areas namely Northern highlands, Indus River plain and
Baluchistan plateau [1]. Northern Highlands consists of Hindu
Kush, Karakoram and Himalayan mountain ranges which also in-
cludes famous high peaks; K2 and Nanga Parbat. Northern part of
the country covers most of the areas of Khyber Pakhtunkhwa (KPK),
Azad Jammu & Kashmir (AJ&K) and upper Punjab areas. Pakistan
receives sufficient precipitation during the year which runs
through its five major and various minor rivers. Northern area,
E-mail addresses: rjamil@iau.edu.sa, cvengr_rehan@hotmail.com.
resources of Pakistan. The country has over half its population in
rural areas which do not have sufficient electricity available to them
[2]. However, big steps are being taken by the government to
overcome this shortage of production by accelerating the con-
struction of all type of electricity production units to somehow
meet the demands of future. Currently Pakistan is producing
around 57% of its electricity by using petrochemicals including oil
and gas, as compared to the relatively cheaper means of hydro-
electricity which stands around 25% of the total electricity being
produced in the country to meet the demand as shown in Fig. 1.
With the increase in population with time, the demand of the
electricity shall also increase and due to unstable economic con-
dition of the country, Pakistan cannot keep relying on thermal
means of electricity due to its high production cost. Moreover, the
higher rate of consumption of non-renewable resources has major
environmental impacts on air quality and climate which cannot be
neglected [3]. Pakistan has to develop cheap but high amount of
electricity generating units to cope up with the probable increased
demand of electricity. A hydroelectricity generating plant has a lot
of benefits over other means of electricity production. In addition to
using a renewable source, the electricity plants operating with

https://doi.org/10.1016/j.renene.2020.02.117
0960-1481/© 2020 Elsevier Ltd. All rights reserved.
2 R. Jamil / Renewable Energy 154 (2020) 1e10

performed a hydropower consumption forecasting for China but

used a seasonal decomposition approach by using vector
regression technique. They proved that the method used by them
was reliable for time series forecasting. A similar research was
done by Yuan et al. [13] by using ARIMA and GM models for
China. The focus of their study was to forecast the primary total
energy consumption for the country. Cassiano et al. [14] pro-
posed an ARIMA model by integrating hierarchical clustering
associated PCA for forecasting the effluent flow in a hydroelectric
plant located in Brazil. Perwez et al. [15] used LEAP model and
Hussain et al. [16] used ARIMA modeling to forecast the demand
of total electricity consumption in Pakistan. The research done by
Fig. 1. Contribution of energy resources in total electricity production in Pakistan [2]. them is found to be elaborative as they analyzed the electricity
consumption by categorizing the buildings into domestic and
commercial areas but hydroelectricity was not the focus of their
water have low operating costs, they have longer life span and
research and overall electricity consumption data was used.
provides full control on variation in power generation to match the
Abundant of study is available on the prospects of use of
varying demand [4].
renewable sources for the production of electricity in Pakistan. Asif
The approximate hydroelectricity generation potential in
[17], Rafique and Rehman [18]. discussed the possibility of using
Pakistan was first estimated to be 42 GW in 2004 but due to
solar and biogas energy for fulfilling the demand of total electricity.
identification of new potential sites the figure rose up to 60 GW in
Sheikh [19] discussed the use of wind potential as a source of
2011 [5], but out of this, the existing installed capacity of hydro-
electricity. He also presented the solar and wind maps along with
electricity generation is only 8.2 GW which is 14% of the available
the identification of hot water spring sites for the use of geothermal
potential as shown in Table 1. The table shows that the major hy-
energy. In another work [20], he suggested the ways for effective
droelectricity dams were constructed in 1976 and earlier and
planning and exploitation of renewable energy resources of
despite having potential, no major dam has been constructed later
Pakistan. Various other researchers [21e24] provided a compre-
due to financial issues of the country. The literature review also
hensive overview of the electricity production by various means in
shows that the emphasis on water resources management was
the country and also suggested the possibilities of overcoming the
more during the late 1960s only [6]. But, there is still a huge margin
crisis by using renewable energy sources. Zafaer et al. [25] have
between the installed capacity and available potential of hydro-
reported the shortcomings in the renewable energy policy of the
electricity, which shall be filled to use the available water to its
country by comparing the same with some of the developed
optimum potential. With depleting water storage capacities due to
countries.
sedimentation [7] and high rate of evaporations and melting of
After going through the literature, it was found that all of the
glaciers, Pakistan needs to put into effect solid measures to
researchers either studied about the renewable energy sources as a
construct new dams which shall help in increasing the water
whole, or forecasted the total electricity demand of the country, but
storage capacities along with increase in hydroelectricity produc-
no study has discussed specifically water as the source of electricity
tion. For this purpose, proper planning and management is
and no forecast for the increase in consumption of the hydroelec-
required which should be based on the future demand and for that,
tricity for future years for Pakistan is available. Hence, it was found
forecasting analysis is must.
necessary to have such a research available in hand covering the
Auto-Regressive Integrated Moving-Average (ARIMA)
current situation of hydroelectricity production and consumption
modeling for the analysis of time series and forecasting based on
in the country and also should forecast the consumption for future
historical data is found to be one of the most worked upon
planning. This article discusses the increase in the hydroelectricity
techniques by the researchers mainly due to its reliability for
consumption in Pakistan based on the actual historical data. The
such type of data [8]. El-Desouky and El-Kateb [9] performed
hydroelectricity consumption has been forecasted as a time series
ANN and ARIMA modeling for forecasting of electric load for the
up to the year 2030 by using univariate ARIMA modeling technique.
Jeddah city in Saudi Arabia. They used both techniques in order
A sensitivity analysis is performed to study the probable effect of
to reduce the errors in the forecasting and concluded that both
annual GDP and population growth on hydroelectricity consump-
the techniques show smaller errors. Erdogdu [10] used ARIMA
tion. Also the forecasted results are compared with the current
modeling technique to analyze the electricity demand using
energy production plan of the Government of Pakistan. This
cointegration for Turkey. He also validated the results which
research, sufficiently fills the scientific study gap and would prove
proved to be matching with the actual data with very less
to be beneficial for the better planning and management of avail-
tolerance value. A similar study for Turkey done by Ediger and
able water resources for the upcoming years and specifically up to
Akar [11] shows the use of ARIMA modeling for forecasting the
the year 2030.
consumption of primary energy demand. Wang et al. [12]

Table 1
Existing installed capacity of major hydroelectricity plants in Pakistan [39].

Name Installed Capacity (MW) Location Constructed Construction Type

Tarbela 3,478 KPK 1976 Embankment Dam

Ghazi-Barotha 1,450 Punjab 2002 Run-of-the-River
Mangla 1,000 AJ&K 1965 Embankment Dam
Neelum-Jhelum 969 AJ&K 2018 Run-of-the-River
Warsak 243 KPK 1960 Concrete Gravity Dam
Chashma 184 Punjab 2001 Run-of-the-River
Other Small Units 675 Misc. e e
 R. Jamil / Renewable Energy 154 (2020) 1e10
2. Methodology of analysis
The data used for forecasting of hydroelectricity consumption in
Pakistan is obtained from the website of BP Public Limited Com-
pany, based in United Kingdom which is related with oil and energy
[40]. BP has expertise in exploration, extraction and production of
renewable and non-renewable energy resources and related works.
Besides this, the company maintains a comprehensive record of
statistics for energy production by various means and its con-
sumption by countries around the world. The data is available for
download at no cost for the purpose of study and research. The
hydroelectricity consumption data is available in Terawatt Hours
(TWh) units of measurement which ranges from 1965 to 2017,
considerably a good span of 53 years. The descriptive statistics of
the data shows an increasing trend in hydroelectricity consumption
with a minimum value of 5.78 TWh in 1965 and a maximum value
of 94.69 TWh happening in 2017. The mean of the data is found to
be 46.36 TWh/year with a standard deviation of 27.89 TWh. The
annual GDP and population growth rates of Pakistan for the same
span of time are obtained from the official website of World Bank
[26] to perform sensitivity analysis. Statistical package EViews 10 is
used to execute all the statistical analysis for this research.
2.1. Time series analysis and ARIMA modeling
A time series can be defined as a variable that is observed
repeatedly after a specified duration of time. The duration of
measurement could be as short as a fraction of second and could be
as long as the years. The variable may show a single upward or
downward trend or it could consist of multitrending structure over
the recorded period of time. The process of measuring the trend
and internal statistical structure of the time series is often termed
as time series analysis. This process includes various statistical
testing and calculations.
Many researchers around the world have used various types of
time series analysis techniques for forecasting as discussed in
Section 1. Artificial Neural Network (ANN) is quite common among
them which is based on machine learning approach and it is mostly
used to define a trend in the a time series data. Long-range Energy
Alternatives Planning (LEAP) model is used for energy policy
analysis and climate change assessment. Grey Model (GM) is used
for forecasting when there are monotonous type of processes
involved in a data but in this type of a model all the values are
assumed to be positive. Auto-Regressive Integrated Moving-
Average (ARIMA) method has also become one of the most
important tool during the last decade for forecasting due to its wide
range of applicability and flexibility of use. It is the combination of
two individual statistical processes namely Auto-Regression and
Moving-Average techniques with an addition of Integrative mod-
ule. Although the above-mentioned methods have their own ad-
vantages over one another but on the other hand each model has
few limitations as well. A univariate ARIMA modeling technique is
used for forecasting in this research due to the fact that it has
proven to be good and reliable in forecasting a value based on its
historic observations and it does not require any additional vari-
ables. Besides its flexibility of use, ARIMA modeling methodology
also has a few limitations. One of those being that this method is
appropriate only for a time series that is stationary in nature. A
series is said to be stationary when the autocovariance and mean of
the series are independent of time and also it shows that there is no
significant autocorrelation existing between the data points. Hence
the data is must to be transformed to a stationary nature before it is
put to test. Another important limitation is the minimum sample
size which is required to perform ARIMA modeling for better and
reliable results. The minimum sample size is recommended as 50
3
[27]. Both of these conditions are fulfilled for this research and the
data is made eligible to be tested by using this method.
A typical ARIMA model is said to have the format of ARIMA (p, d,
q), where p is the Auto-Regressive term, d is the order of differ-
encing required for the data to make it stationary and q is the
Moving-Average term. Although this model is quite complicated
but Box and Jenkins presented a comprehensive stepwise approach
for analysis and forecasting of a time series by using ARIMA models
in 1976. Their methodology became so popular that the ARIMA
models are very often called as Box-Jenkins models.
The time series forecasting by using ARIMA models can be
performed in four basic steps namely, Identification, Estimation,
Diagnosis and Forecasting [28,29]. The whole process of Box-
Jenkins methodology used in the research is shown as a flow
chart in Fig. 2. Before the data is put into the Identification stage, it
is necessary to check the stationarity of the data. To check the
stationarity of the data, unit root test is performed for the time
series. The unit root test regresses the time series yt on its lagged
value yt-1 [10] and the results of this test show the nature of the
data in terms of stationarity.
If the data is non-stationary, the estimation cannot be per-
formed and there is a need to differentiate the data repeatedly till it
becomes stationary. The number of times the data is differenced for
its stationarity defines the order of differencing, d, of the ARIMA
model. Many types of unit root tests are found in the literature
including Augmented Dickey-Fuller (ADF) test [30], Philips-Perron
test [31], Levin-Lin-Chu test [32], Breitung test [33], Im-Pesaran-
Shin test [34] etc. However, ADF unit root test is used for the
research which is best suited for large samples given by the
following regression equation [29].
X
p
Dyt ¼ ayt1 þ dx’t þ bi Dyti þ εt (1)
i¼1
where Dyt is the first difference operator of the given time series, yt-
1 is the lagged value, a and d are the parameters to be estimated, xt
is the optional regressor which may consist of a constant and εt is
the white noise error term.
The ADF test builds a parametric correction for higher-order
correlation by supposing that the y series follows an auto-
regressive process and adding p lagged difference terms of the
dependent variable y to the test regression. This improved speci-
fication is then used to test the hypothesis using the t-ratio.
The total data used in this research is spread over 53 years which
is transformed to stationary nature. After differencing the data, to
make it stationary, it remained at 52 which is well above the
requirement of minimum sample size, hence satisfying both con-
ditions of ARIMA modeling.
2.1.1. Identification of ARIMA model
In the first step of ARIMA modeling by using Box-Jenkins
approach, the number of significant lags are observed from the
correlogram of the stationary time series data. A correlogram
shows the autocorrelation (ACF) and partial autocorrelation func-
tions (PACF) in the graphical and numerical form. These functions
describe the pattern of temporal dependence in the time series data
[35]. Both columns of ACF and PACF are studied and the number of
lags which are found significant, either beyond or very close to the
range of 95% confidence interval. The sequential number of sig-
nificant lags shown by PACF gives the AR term, p, and the same
shown by ACF gives the MA term, q, of the ARIMA model. The ACF is
the linear correlation between observations k time lags separately
of a time series Y and it is estimated by the following equation.
4 R. Jamil / Renewable Energy 154 (2020) 1e10

Fig. 2. Box-Jenkins methodology for ARIMA modeling (developed by Author).

8 t1 k¼1
>
>
< Xk1
∅k ¼ tk  ∅k1; j tkj (3)
>
> j¼1
k>1
: Xk1
P 1 ∅k1; j tkj
t¼kþ1 ðYt  YÞðYtk  YÞ j¼1
tk ¼ PT 2
(2)
t¼1 ðYt  YÞ where tk is the autocorrelation estimated at lag k and t1 depicts the
value of ACF at first lag when k ¼ 1.
where Y is the sample mean of Y, T is the number of observations
and k show the number of lags. The PACF of a series measures the
correlation of Y values that are k periods apart after removing the 2.1.2. Estimation
correlation from the superseding lag. The PACF is measured by After the significant lags have been identified, the tentative
using the following algorithm. ARIMA (p, d, q) models are prepared and equations are developed
 R. Jamil / Renewable Energy 154 (2020) 1e10
for the process of estimation. Various tentative ARIMA models can
be developed for testing and the one found to be more appropriate
can be selected for further process of diagnosis. The measure of the
fitness of the model is based on few criteria. A model is said to be a
best fit or most appropriate model if it has most number of sig-
nificant coefficients, its variance is lowest, it has highest adjusted R2
value and lowest AIC and SBIC values out of all the estimated
tentative ARIMA models. All these parameters for model selection
are discussed below.
The number of significant coefficients is the most important
criterion to be considered for selection of an appropriate model. A
model having no significant coefficients can be eliminated because
its coefficients are not contributing to the fitness of model to the
actual data. To determine if each coefficient is statistically signifi-
cant, its p-value is observed. A significance level of 5% is considered
for the research i.e. a ¼ 0:05: Hence if p-value  a, the coefficient is
considered to be significant and if otherwise it is not statistically
significant. A model having highest number of significant co-
efficients qualifies for further parametric analysis.
Variance (s2) of the model is the second parameter to be
checked. It is the measure of the dispersion of the data around its
mean value. The lower the variance, better is the model. A poorly
fitting model has higher variance which shows that the individual
data values are too far from their mean value. The variance can be
calculated by the following relation.
b
ε’ b
ε
s2 ¼ (4)
T k
where b ε’ b
ε is the sum of squared residuals, T is the number of ob-
servations and k is the number of right-hand side regressors.
Another important parameter to be considered is the coefficient
of determination (R2) which measures the quality of the regression
analysis based on its predicted values of dependent variables. In
some cases this parameter does not show the good value if more
regressors are added in the time series. Hence adjusted R2 is
introduced to remove this effect as it does not depend upon the
number of additional regressors [29]. The adjusted R2 can never be
larger than the actual R2 and its negative value shows a poorly fit
model. The adjusted R2 is given by the following equation.
 T  1
R2 ¼ 1  1  R2 (5)
T k
The third important parameter is the Akaike Information Cri-
terion (AIC) value. This value is used in model selection procedure
when there are non-nested alternatives in the series. Smaller is the
AIC, more it is preferred. It is computed by the following equation.
l k
AIC ¼  2 þ2 (6)
T T
where l is the log-likelihood which is given by the following
equation.
Th b ε i
ε’ b
l¼ 1 þ log 2 p þ log (7)
2 T
where l is the log-likelihood, b
ε’ b
ε is the sum of squared residuals
and T is the number of observations. The last parameter to be
considered for model selection is Schwarz-Bayesian Information
Criterion (SBIC). This value also helps in determining the appro-
priate length of the distributed lag. Just like the AIC, the smaller
value of SBIC is preferred in analysis. It can be calculated by using
the following equation.
5
l k log T
SBIC ¼  2 þ (8)
T T
where l is the log-likelihood given by Equation (7), T is the number
of observations and k is the number of right-hand side regressors.
2.1.3. Diagnosis
The tentative model qualifying all the criteria mentioned in
estimation process is said to be the appropriate model and can be
put to further test of diagnosis. During this process the residuals of
the estimated models are studied to check for the white noise. In
few situations, the residuals may contain any leftover information
which needs to be included in the model making it a more of a
complex nature. This is suggested by the correlogram of the re-
siduals. If the correlogram is found to be flat, it means that the
selected model is already good for forecasting, but if there is any
significant ACF and PACF value in the residuals, that specific lag
must be included in the ARIMA model as an additional term and
estimation is required to be performed again followed by a repet-
itive diagnosis check. The process is repeated till the time a flat
correlogram of residuals is obtained as mentioned in Fig. 2.
2.1.4. Forecasting
When the model has been properly examined for its fitness, it
can be processed further for forecasting the time series. In this
stage the future values of the time series are predicted by the model
based on the final ARIMA model produced during the estimation
stage. The general form of the forecast equation for ARIMA (p, d, q)
model can be written as follows.
X
p X
q
yt ¼ c þ fi yti þ qj εtj þ εt (9)
i¼1 j¼1
In this equation first term c, on right-hand side of the equation,
is the constant representing the intercept, fi and yt-i are the pa-
rameters and regressors for AR part of the model, while qj and εt-j
are the parameters and regressors of the MA part of the model
respectively, whereas εt represents the white noise error term in
the model calculation.
2.2. Sensitivity analysis
An important test of statistical modeling related to forecasting is
the sensitivity analysis which defines the temporal relation of an
output when other related parameters are fluctuating with time. It
also provides the outcomes for uncertainty of situations to foresee
its effects on the results obtained through a statistical model [36].
A multivariate time series analysis which involves more than
two parameters becomes sensitive and results in less accurate
outcomes as it produces more white noise in the forecast model.
Hence, a univariate ARIMA modeling method is used in the
research involving only one dependent variable which is the hy-
droelectricity consumption for the case. To study the combined
effect of other relevant parameters, another multivariate statistical
model is developed by using Multiple Linear Regression (MLR)
analysis. Two additional parameters are selected to be studied for
any possible effect on the forecast model which are the annual GDP
and population growth rates. The past 53 years data for these two
parameters as obtained from the official website of The World Bank
is shown in Fig. 3. The annual GDP growth rate is found to be
fluctuating a lot along these years however, on the other hand, the
annual population growth rate shows a mild sloped graph. The
mean annual rate of GDP and population growth rates are found to
be 5.2% and 2.7% respectively.
6 R. Jamil / Renewable Energy 154 (2020) 1e10
Fig. 3. Annual Growth Percentage of GDP and Population of Pakistan for the year
1965e2017 [26].
The general form of MLR model for this research is shown below.
CH ¼ bo þ b1 GDP þ b2 P (10)
where CH is the estimated hydroelectricity consumption, bo is the y-
intercept of the regression line and b1 - b2 are the coefficients of the
annual growth rates of GDP and population, whose values are
determined by regression analysis.
Various values of GDP and population growth are assumed to
create different scenarios to notice the effect on hydroelectricity
consumption during the sensitivity analysis. The resulting regres-
sion equation gives an estimated value of hydroelectricity con-
sumption for a specific value of GDP and population growth, for
each scenario.
3. Results & discussion
3.1. Unit root test for stationarity
The available data was put to analysis in EViews 10. The
Fig. 4. The correlogram of hydroelectricity consumption data for Pakistan 1965e2017.
correlogram at level, shown in Fig. 4, was developed for the raw
data to study the nature of the data in terms of stationarity. A
correlogram shows the plots of ACF and PACF against a specified lag
length. 24 lags were used for the current data. It can be seen that
the ACF starts at 0.942 and decreases gradually till it reaches almost
zero around lag 19, after which it becomes negative. Moreover, the
values are outside the confidence interval of 95% up to 13 lags. On
the other hand, the PACF is maximum at first lag with a value of
0.942 but suddenly drops showing no pattern at all.
The correlogram clearly depicts that the data is non-stationary
in nature in its raw form and needs to be differenced because
forecasting cannot be performed on a non-stationary data. To
validate this observation, ADF test was performed on the raw data.
The probability value of 0.965, being greater than 0.05, also con-
firms the non-stationarity of the data.
Table 2 shows the statistical hypothesis results obtained by
performing ADF Test on EViews 10. The hypothesis test was based
on the null hypothesis that the time series data of hydroelectricity
consumption has a unit root.
To make the time series stationary, 1st difference of the data was
calculated and correlogram was observed which is shown as Fig. 5.
The correlogram at 1st difference shows a patternless diagrams for
ACF and PACF, which indicates that the data has become stationary.
ADF test was performed again for the differenced data and the
probability value was found to be dropped to zero (a < 0.05),
confirming that the series has become stationary.
3.2. ARIMA modeling and hydroelectricity consumption forecasting
The first step in ARIMA modeling is the identification of those
lags which are significant. In Fig. 5 it can be observed that the ACF
and PACF coefficients at lag 7 and 9 are out of the range of confi-
dence interval of 95% as their bars extend beyond the dotted lines.
In addition to this, lag 19 in PACF also shows significant value and is
very close to the margin of confidence interval, though it is not
beyond the dotted lines but yet shall be included in the modeling to
avoid any possible error. Based on this information obtained from
the correlogram, nine different ARIMA models were prepared to be
estimated. As ARIMA model has a general form of ARIMA (p, d, q),
where d shows the number of times the data has been differenced
which in this case is 1. Hence the nine models can be listed as
ARIMA (7, 1, 7), (7, 1, 9), (1, 1, 19) based on lag no. 7, then ARIMA (9, 1,
7), (9, 1, 9), (9, 1, 19) based on lag no. 9 and similarly based on lag no.
19, ARIMA (19, 1, 7), (19, 1, 9) and (19, 1, 19).
These identified ARIMA models were put to test for estimation.
The results of the estimates obtained from EViews 10 are shown in
Table 3.
Out of the nine tentative models put to estimation, two ARIMA
models had most number of significant coefficients namely ARIMA
(7, 1, 9) and ARIMA (9, 1, 7). However by observing other parame-
ters, the latter was found to be the most appropriate model for
having lowest variance, AIC and SBIC values and highest adjusted R2
value.
ARIMA (9, 1, 7) was put to residuals diagnostics check. For a
model to be used for forecasting the residuals of the model shall lie
within the confidence interval of 95% or in other words the residual
diagram must be flat. The correlogram of residuals was prepared for
the estimated ARIMA (9, 1, 7) and it was found that lag no. 19 still
showed some significance. This shows that there was some infor-
mation in that lags which was left to be captured in the model.
Based on this observation the selected ARIMA model was adjusted
and two new models were prepared for repeated estimation pro-
cess. The results of the adjusted ARIMA models are shown in
Table 4. By looking at the results and applying the same criteria to
select the most appropriate models out of the adjusted ARIMA
 R. Jamil / Renewable Energy 154 (2020) 1e10 7

Table 2
ADF test results for statistical hypothesis.

Variable Hydroelectricity Consumption 1965e2017 Hydroelectricity Consumption 1965e2017

Data Form Raw Data (At Level) 1st Difference

T-Statistic 0.1324 6.2718
Critical Test Value at 5% Significance Level 2.9188 2.9199
Probability 0.9653 0.0000
Hypothesis Result Do Not Reject the Null Hypothesis Reject the Null Hypothesis
Concluded Nature of Data Non-Stationary Stationary

Fig. 5. The correlogram of the differenced hydroelectricity consumption data. Fig. 6. The correlogram of the residuals for selected ARIMA model.

Table 3
Results of tentative ARIMA models showing comparison of parameters.

Sr. No. ARIMA Model No. of Significant Coefficients Variance (s2) Adjusted R2 AIC Value SBIC Value

1 (7, 1, 7) 0 9.171709 0.050226 5.223053 5.373148

2 (7, 1, 9) 2 7.713225 0.201259 5.079371 5.229467
3 (7, 1, 19) 0 8.452907 0.124661 5.176506 5.326602
4 (9, 1, 7) 2 7.596322 0.213365 5.066861 5.216957
5 (9, 1, 9) 0 8.749581 0.093939 5.184698 5.334794
6 (9, 1, 19) 1 7.814639 0.190757 5.121437 5.271532
7 (19, 1, 7) 0 8.405699 0.12955 5.173076 5.323172
8 (19, 1, 9) 0 7.926427 0.179181 5.134218 5.284313
9 (19, 1, 19) 0 9.870557 0.022143 5.295265 5.445361

Table 4
Results of adjusted ARIMA models showing comparison of parameters.

Sr. No. ARIMA Model No. of Significant Coefficients Variance (s2) Adjusted R2 AIC Value SBIC Value

10 (9 & 19, 1, 7) 2 6.729279 0.288325 5.034548 5.222167

11 (9, 1, 7 & 19) 2 6.389634 0.324245 5.021015 5.208635

models, model no. 11 ARIMA (9, 1, 7 & 19) comes out to be the
optimum model.
For further investigation, the correlogram of the residuals for
this model was observed and it was found to be flat showing that all
the required data and information has been captured in it and all
lags were well within the limit of confidence interval, as shown in
Fig. 6.
Hence the adjusted ARIMA model (9, 1, 7 & 19) was finally
selected for forecasting the hydroelectricity consumption for
Pakistan up to the year 2030. After getting the results from EViews
10 by going through the above process the general forecasting
equation (Eq. (9)) can now be written as follows.
yt ¼ 1:696 þ 0:435 yt9  0:417 εt7  0:381 εt19 (11)
8 R. Jamil / Renewable Energy 154 (2020) 1e10

Fig. 7 shows the plot of historical and the forecasted values of

hydroelectricity consumption in Pakistan up to the year 2030 as
obtained through forecasting equation (Eq. (11)) prepared by
ARIMA modeling.

3.3. Comparison and validation of results

For validation of the developed forecasting equation, the equa-

tion was used to predict the hydroelectricity consumption for the
years 2001e2010 for which the actual data is already available. The
comparison of the values obtained from the forecast equation and
the actual data is shown in Fig. 8 graphically and in Table 5. From
the table it is clear that the predicted values are very close to the
actual values of hydroelectricity consumption for the year
2001e2010 and the difference is found to be within the range of
±1.6% with an average difference of only 1.23%. Fig. 8. Graphical comparison of actual and predicted hydroelectricity consumption for
This indicates that the forecasting model has an excellent fitting the year 2001e2010.
effect to the actual data and would show reliable results when
applied for the future. After validation of the forecasting equation,
Table 5
the future forecast values of hydroelectricity consumption in Comparison of actual and predicted values of hydroelectricity consumption for the
Pakistan for the year 2018e2030 are calculated as shown in Fig. 9. year 2001e2010.
The forecasted values show that by the end of year 2030 the hy-
Year Hydroelectricity Consumption (TWh) % Difference
droelectricity consumption would increase up to 116.87 TWh
which was at 94.69 TWh in 2017. This results in a total increase of Actual Value Predicted Value
23.4% over a span of 13 years, with an average annual increment of 2001 56.2 57.0 1.45
1.65%. 2002 61.3 62.1 1.38
2003 64.7 64.1 0.97
2004 69.0 68.4 0.85
3.4. Supply-demand analysis of hydroelectricity in Pakistan 2005 80.8 79.5 1.59
2006 79.6 78.9 0.88
2007 83.2 82.5 0.86
Keeping in view the expected increase in the demand of elec-
2008 78.5 79.7 1.49
tricity in the country with the increase in population, The Ministry 2009 74.2 75.3 1.54
of Water and Power, Government of Pakistan has a lot of hydro- 2010 77.6 78.6 1.33
power projects streamlined. These projects are either under con-
struction or ready to be constructed and would contribute to the
electricity development in the country by the year 2030. As dis- hydroelectricity consumption forecast created in the research to
cussed earlier the hydroelectricity has a major contribution in the compare with the hydroelectricity production available in the
total electricity demand and production, hence to stabilize the future. The production capacity of hydroelectricity is planned to be
demand for the future, few mega projects are included in the extended up to 25 GW by 2030 from 8.2 GW which was being
expansion plan. It becomes necessary to compare the

Fig. 7. Graph showing forecasted hydroelectricity consumption along with historical data.
 R. Jamil / Renewable Energy 154 (2020) 1e10 9

Table 6
Sensitivity analysis for hydroelectricity consumption of Pakistan against annual GDP
and population growth rate.

94.69 Population Growth Rate

1.75 2 2.25 2.5 2.75 3

GDP Growth Rate 4 108.01 99.73 91.44 83.16 74.87 66.59

4.5 107.21 98.93 90.64 82.36 74.07 65.79
5 106.41 98.13 89.84 81.56 73.27 64.99
5.5 105.61 97.33 89.04 80.76 72.47 64.19
6 104.81 96.53 88.24 79.96 71.67 63.39
6.5 104.01 95.73 87.44 79.16 70.87 62.59
7 103.21 94.93 86.64 78.36 70.07 61.79
7.5 102.41 94.13 85.84 77.56 69.27 60.99

Fig. 9. Graph showing forecasted hydroelectricity consumption along with historical
data.
produced at the end of year 2018 [2]. By keeping a capacity factor of
55%, as calculated for hydroelectricity plants in Pakistan [37], the
annual hydroelectricity generation would increase from 39.5 TWh
to 120 TWh by 2030. Fig. 9 shows the comparison of the forecasted
hydroelectricity consumption by using forecasting equation ob-
tained through ARIMA modeling and generation by the year 2030.
From the figure it is clear that Pakistan is currently in deficit of
hydroelectricity generation. The lag is being covered by the Inde-
pendent Power Producers (IPPs) which have either been estab-
lished indigenously or have been hired on rent from external
sources. With all the projects streamlined for future construction,
only in the year 2030, Pakistan would be able to catch up to the
hydroelectricity demand without depending on IPPs and producing
the same through hydropower plants only. Major hydroelectricity
projects planned to be constructed up to the year 2030 include
Diamer-Bhasha dam, Dasu dam, Suki Kanari and Karot hydropower
plant with production capacity of 4,500 MW, 4,320 MW, 870 MW
and 720 MW respectively [38]. But as mentioned by Nicholas and
Buckley [2]; huge challenges are being faced for these projects to be
implemented as planned including financial and political issues. In
case of any delay in any of the projects, as mentioned by Abbasi
et al. [38]; the country would be spending money on IPPs in future
as well and it would have to rely on other means of thermal and
nuclear power which would affect the country’s economy badly.
3.5. Effect of GDP and population on hydroelectricity consumption
After performing multivariate MLR analysis, the general form of
regression equation (Eq. (10)) can now be written as follows.
the population growth rate remains the same over time. Fig. 10
shows the graphical representation of the effect on the hydro-
electricity consumption caused by the variation in GDP growth rate
for a constant population growth rate of 2%.
4. Applicability of presented methodology for other countries
Forecasting of hydroelectricity consumption can be performed
for other developing countries by following the similar methodol-
ogy presented in this research. The historical data of the country
under study can be obtained through the sources mentioned in
Section 2 or any other governing authority. For a reliable statistical
analysis of a time series by using ARIMA method, it is recom-
mended to have a minimum sample size of 50, which means that
the past data for at least 50 years should be obtained [27]. The four
major steps of Box-Jenkins methodology for ARIMA modeling
(Fig. 2) can be followed to develop the forecasting equation and
further estimation of hydroelectricity consumption in future years
for any country.
5. Conclusion
Considering the electricity supply and demand condition in the
country, this research was taken up to study the historical and
future trend of electricity consumption produced by hydropower
plants in Pakistan. Forecasting studies hold an important signifi-
cance in planning and managing the resources for the future. The
obtained historical data was put to statistical analysis and ARIMA
modeling was performed to predict the consumption of hydro-
electricity up to the year 2030 for Pakistan. The results obtained by
the developed forecasting equation through ARIMA modeling were
validated and found to be matching with the actual available data,

CH ¼ 172:4  1:6 GDP  33:14 P (12)

The developed MLR model shows statistically acceptable results.
A sensitivity analysis was performed for hydroelectricity con-
sumption against annual GDP and population growth based on Eq.
(12), as shown in Table 6. A value of 94.69 TWh was taken as base
value for the analysis corresponding to the year 2017 for which
annual growth rates of GDP and population are 5.7 and 2.07
respectively. To create various scenarios, the range for the annual
GDP growth rate was taken as 4%e7.5% and the same for the annual
population growth was allowed to be varying between 1.75% and
3%.
The analysis show convincing results. It can be seen that with
the increase in GDP growth rate the hydroelectricity consumption
decreases for a constant value of population growth. It shows that
when the GDP of a country increases, it becomes less reliant on Fig. 10. Effect of GDP growth rate on hydroelectricity consumption for a constant
hydroelectricity consumption and the value decreases even when population growth rate of 2%.
10 R. Jamil / Renewable Energy 154 (2020) 1e10
showing reliability of the equation for forecasting. The forecast of
data showed an average annual increment of 1.65% in hydroelec-
tricity consumption with a cumulative increase of 23.4% by the year
2030. A brief comparison of this forecasted consumption values and
the planned hydroelectricity generation by the Government of
Pakistan was also presented. The comparison clearly showed that
currently the country is in deficit of hydroelectricity and the gap is
being filled by using independent power producers (IPPs). If the
planned hydropower projects are constructed in time as per
schedule, only then the country shall be able to meet the demand of
hydroelectricity by the year 2030. A sensitivity analysis was also
performed to study the relation of hydroelectricity consumption to
the annual population and GDP growth rate of the country. The
results of the sensitivity analysis were found befitting and useful.
Author contribution section
Rehan Jamil Conceptualization, Investigation, Methodology,
Statistical Analysis, Original Draft Preparation, Reviewing and
Editing, Revisions.
Declaration of competing interest
The authors declare that they have no known competing
financial interests or personal relationships that could have
appeared to influence the work reported in this paper.
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