Forecasting Long-term Electricity Demand in the Residential Sector

This work describes a methodology for long-term electricity demand forecast in the residential sector. The methodology has been used in the power market studies of some Brazilian distribution utilities. The methodology is based on decomposition of the total electricity residential consumption in three components: average consumption per consumer unit, electrification rate and number of households. Then, the forecast for the total electricity consumption in residential sector is the product of forecasts for these three components. The prediction for the number of households is based on demographic models while the future trajectory of the electrification rate is defined by the targets for achieving the universal access to electricity. The product of these two components provides a forecast to the number of residential customers. The average consumption per unit consumer depends on the macroeconomic scenarios for GDP, average household income and income distribution. The proposed methodology provides a framework to integrate macroeconomic scenario, demographic projection and assumptions for ownership and efficiency of electric appliances in a long-term demand forecast. In order to illustrate the application of the proposed methodology, this paper presents a ten-year demand forecasts for the residential sector in Brazil.