www.enreport.com

One of the many questions regularly discussed in Turkey is whether the energy demand projections are faulty or there is an "age-old" program that doesn't fit today's world. To challenge this question and to show that results are a product of inputs, I made an approximation to Turkish Energy Ministry's MAED results of 2004. The following excel sheet is a result of my work. What I basically did was to take the published forecasts from the ministry's web site and make the appropiate approximations. By permission, I posted it on several forums. And no one criticized it, and I received emails for how to use the model or methodology!
The main point in this work is as long as you put economic realisations model corrects itself. At the end even some Nobel price winning economists do not owe their success to that software or this software but a bunch of simple equations.
The following forecast assumes 2009 is not a negative growth year.
My forecast for March is as follows (for total energy):

And electricity demand is as follows


Excel file is here, use with permission ( The economic and demographic growth rates are not reflecting the real values)

The happy days are over and we cannot have a good prediction for the end of this recession. Energy demand is highly correlated with economic growth. For developed countries, energy demand growth is less than the economic growth, on the other hand for developing nations it may be more than the economic growth.
So to forecast energy demand, oil prices and new investment cycle, economic forecasts are very important.
Recently econbrowser.com website has a very interesting post to read. It may need some econometric background but the main point is quite clear. Will the rebound from the recession start with a big jump or just average?
Answers vary, and if you read the post and relevant links, there are two explainations:
1. It will be higher than normal : (Trend stationary)
"suppose that the economy is down because people are postponing the purchases of cars and other goods out of fear. That would be a trend-stationary story, because it suggests a nice rebound when people get over their fear."
2 . It will be just around average: (Unit root)
"Suppose that the economy is down because we accumulated the wrong types of physical capital (houses) and human capital (skills in mortgage securitization). That is a unit-root type problem. Yes, the economy will start growing again at some point, but that misallocation of physical and human capital is a permanent loss. We are not going to make up for it with some above-normal growth."

The detailed explanations and models worth reading:

From EconBrowser.com

A simple regression of log GDP on a time trend and lagged log GDP, over the 1967q1-08q4 period yields the following:

y_t = 0.424+0.0004time + 0.945y_t-1

Where Adj-R² = 0.9995, SER = 0.008

The AR1 coefficient of 0.945 (se = 0.03) implies a half life of 12.25 quarters, or slightly over 3 years for a deviation from output. Since AR coefficients are biased downward, this is a downwardly biased estimate of the half life.

Brad de Long's Blog

A more technical article about this issue:
Unit root or trend stationary
from Greg Mankiw's Blog