Simulating Electricity Demand of Industries by System Dynamics

Nowadays, electricity is one of the most significant infrastructures required for economic development of countries. Hence, predicting electricity demand is very important especially in industry as a major electricity-consuming sector. The majority of studies under the subject of electricity demand have been performed by econometrics and it is not possible to investigate the effect of different policies on electricity demand. But system dynamics has the advantage of providing this possibility. Considering studies accomplished on electricity demand of industry, factors affecting electricity demand have been recognized as value-added, electricity tariff and equipment efficiency used in industry. Since efficiency is a qualitative concept, electricity intensity index has been used to measure efficiency of industries. Considering these factors and dividing electricity consumption to variable and constant consumption and using the concept of electricity intensity, electricity demand model of industry has been attained through system dynamics. The model has been run for years 1997 to 2003 and electricity consumption of model has been compared with real data in these years for validation of the model. Since error of model is small enough, electricity consumption of industry sector has been predicted up to year 2021.