Short-Term Energy Outlook Model Documentation: Electricity Generation and Fuel Consumption Models
January 9, 2014
Overview
The U.S. Energy Information Administration's Short-Term Energy Outlook (STEO) produces monthly projections of energy supply, demand, trade, and prices over a 13-24 month period. Every January, the forecast horizon is extended through December of the following year. The STEO model is an integrated system of econometric regression equations and identities that link the various components of the U.S. energy industry together in order to develop consistent forecasts. The regression equations are estimated and the STEO model is solved using the Eviews 8 econometric software package from IHS Global Inc. The model consists of various sub-modules specific to each form of energy resource. All modules provide projections for the United States, and some modules provide more detailed forecasts for different regions of the country.
The electricity supply and fuel consumption modules of the STEO model provide, respectively, forecasts of electricity generation from various types of energy sources and forecasts of the quantities of fossil fuels consumed for power generation. The supply module is closely linked with the electricity demand module, from which the total level of required generation is derived. The fuel consumption module is closely associated with the electricity supply module, and it provides inputs into other components of the STEO model. The structure of the electricity industry and the behavior of power generators varies between different areas of the United States. In order to capture these differences, the STEO electricity supply and fuel consumption models are designed to provide forecasts for the four primary Census regions shown in Figure 1.