CEA Releases New Norms For Forecasting Power Demand

The Central Electricity Authority (CEA) has released its latest medium- and long-term power demand forecast guidelines. It said that the central agency had been carrying out the demand forecast of the country for medium-term and long-term periods through Electric Power Surveys (EPS) periodically to bring out National Electricity Plan (NEP). The new guidelines of the CEA was published today at its official website.

The institution said demand forecast was essential for power procurement planning and investment in the power sector. The new CEA guidelines has chalked out specific timelines and modalities for long-term and medium-term power demand forecast. It said that at least long-term forecasts should be for the next ten years. It also said that the detailed power demand forecasting exercise should be reviewed on a yearly basis and updated, if required.

The new norms also talked about making the demand forecast at a more granular level, ideally at the discom or state level. “The forecasts should be at least prepared at the DISCOM/State level. In addition, forecast at more granular levels i.e. Zonal level, Circle level, District level, Sub-Station Level, Feeder/Transformer level, should also be carried out in case of availability of adequate granular level data. Such granular forecasts would be more useful in power infrastructure planning,” the document read.

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It also added that the forecast should be worked out year-wise at least. “In addition, month-wise/day-wise/hour-wise/time-block-wise forecasts should also be done if adequate granular level data is available,” it said. It also said that the forecast should be carried out in at least three scenarios-Optimistic scenarios, Business As Usual (BAU) scenario, and Pessimistic scenario.

The proposed guidelines by the CEA said that considering government policies on such forecasts was also important and needed to be accounted for long-term power demand forecasts.

“The long-term forecast should also be ideally based on the assessment of the impact of specific government policies, developmental plans, and other emerging aspects in the definite quantum of electrical energy in addition to past growth trends. However, if such assessments are not feasible beyond the medium-term horizon, then the long-term forecast should be based on further extrapolation of the growth trends estimated under the medium-term period,” the new CEA guidelines said.

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It also advocated for taking the three-year preceding the year as the base year for forecasting. “The base year for the forecast should ideally be taken as the three-year (T-3) preceding the year during which the forecast exercise is being carried out. This is to be done to test the performance of the forecasting model by comparing the forecast results obtained for (T-2) and (T-1) years with actual available data (termed as Out of Sample Validation),” the document said.