An econometric analysis of energy consumption in Nepal

Economic growth and energy demand are closely related. A clear understanding of the relation between energy and economic demand would help energy planners to understand the implications of changes in the exogenous variables when the underlying relationships are fairly stable. An understanding of broader impacts of energy use can be of great help in designing better energy policies, at least at the macro level. Therefore, in this paper, various econometric models have been proposed after studying the influence and significance of various independent variables with chosen dependent variables. The models are classified into fuel models and consumption sector models. These models have been used to provide medium-range energy demand projections till 2012. Policy implications of projections are also discussed.