Energy Policy 35 (2007) 1701–1708 ARIMA forecasting of primary energy demand by fuel in Turkey $ Volkan S - . Ediger a , Sertac - Akar b,Ã a Cumhurbas - kanlıgˇı,C - ankaya, 06689 Ankara, Turkey b Geological Engineering Department, Middle East Technical University, I ˙ no¨nu ¨ Bulvarı, 06531 Ankara, Turkey Available online 3 July 2006 Abstract Forecasting of energy demand in emerging markets is one of the most important policy tools used by the decision makers all over the world. In Turkey, most of the early studies used include various forms of econometric modeling. However, since the estimated economic and demographic parameters usually deviate from the realizations, time-series forecasting appears to give better results. In this study, we used the Autoregressive Integrated Moving Average (ARIMA) and seasonal ARIMA (SARIMA) methods to estimate the future primary energy demand of Turkey from 2005 to 2020. The ARIMA forecasting of the total primary energy demand appears to be more reliable than the summation of the individual forecasts. The results have shown that the average annual growth rates of individual energy sources and total primary energy will decrease in all cases except wood and animal–plant remains which will have negative growth rates. The decrease in the rate of energy demand may be interpreted that the energy intensity peak will be achieved in the coming decades. Another interpretation is that any decrease in energy demand will slow down the economic growth during the forecasted period. Rates of changes and reserves in the fossil fuels indicate that inter-fuel substitution should be made leading to a best mix of the country’s energy system. Based on our findings we proposed some policy recommendations. r 2006 Elsevier Ltd. All rights reserved. Keywords: Primary energy demand; ARIMA forecasting; Turkey 1. Introduction Energy demand forecasting is one of the most important policy tools used by the decision makers all over the world. This is true especially for energy emerging markets such as Turkey. Ediger (2003a) has shown that, although a medium consumer, Turkey’s primary energy demand has grown rapidly during 1989–1999 and is expected to continue in the future. Turkey will certainly play a significant role in the world’s energy sector during the first decades of the 21st century. Similar to most countries forecasting is particulary carried out for demand side of the energy system in Turkey. Forecasting future energy production of the country is taken into consideration in publications such as Hepbas -lı et al. (2002), O ¨ ztu¨rk et al. (2004), O ¨ ztu¨rk and Hepbas -lı (2004), Ceylan et al. (2005a, b), and Ediger et al. (in press). Recently, in Ediger et al. (in press), we developed a decision support system for forecasting fossil fuel production by applying regression, Autoregressive Inte- grated Moving Average (ARIMA), and Seasonal Auto- regressive Integrated Moving Average (SARIMA) methods to the historical data from 1950 to 2003 in a comparative manner. The method proposed in that study integrated the models obtained from each method by using some decision parameters related to goodness-of-fit or confidence inter- val, behavior of the curve, and reserves. The studies on energy demand forecasting in Turkey dates back to 1960s. The tradition of energy forecasting by using simple regression techniques was initiated by the State Planning Organization (SPO). Similar studies later have been continued by the Ministry of Energy and Natural Resources of Turkey (MENR) and a number of academicians. These early forecasts consistently predicted much higher values than the consumptions that actually occurred. Later, starting from 1984, several econometric ARTICLE IN PRESS www.elsevier.com/locate/enpol 0301-4215/$ - see front matter r 2006 Elsevier Ltd. All rights reserved. doi:10.1016/j.enpol.2006.05.009 $ The opinions and statements in this article are those of the authors alone and do not, in any way, reflect the official policy or position of their government or employer. Ã Corresponding author. Tel.: +90312 210 5744; fax: +90312 210 1263. E-mail address: asertac@metu.edu.tr (S. Akar).