Empirical analysis of electricity demand in Albania. the impact in ecosystem

Albania represents the case of a developing country with a volatile demand for power facing an unstable domestic supply, especially during the last decade. Understanding future patterns of electricity usage is crucial in various planning contexts, the most important of which would be security of supply. In this framework, acknowledging the future national demand for electricity is needed for electricity providers for them to plan the sufficient and security of electricity supply. The aim of this paper is electricity demand modelling and forecasting in Albania. The model developed for the determinants of electricity demand for Albania allows understanding of the patterns of consumption behaviour. The main demand drivers of the electric consumption considered here are macroeconomic and demographic factors. The current work empirically estimates that the main determinants of electricity consumption in Albania for the period 1990-2014 are GDP, population and remittances. Results coefficients are then used to forecast electricity consumption for the period 2015-2030. We believe that the main contribution of the proposed estimation forecasts would be for correctly informing policy makers regarding electricity demand patterns in Albania and in forming expectations on a vital sector such as electricity.