Forecasting sale of geothermalenergyin Kenya using an arima model

Abstract

This study seeks to investigate the potential of geothermal energy in Kenya so as to determine its capacity to supply the country with electric power. The study argues that the exploitation and commercialization of geothermal energy is primarily a heat mining operation rather than tapping an instantly renewable energy source. It also considers the potential rate of growth in the installed geothermal power capacity. The study is informed by a recent research which observed that between the years 20I0-2050, the capacity of global geothermal electricity will continue to increase to a figure of 58000MW from 10000MW largely due to commercial incentives offered by governments and international development agencies. To fulfil the objectives of this study, an ARIMA regression modelling is applied in forecasting the future outlook of geothermal electricity sales in megawatts (MW). Among the main factors considered in the analysis include the KPLC and KENGEN s target electricity sales as well as the government's policies regarding the supply of the electricity to households in Kenya. The ARIMA time series are useful models to predict the sales of electricity. From this study, we concluded that ARIMA model can be used by other businesses for planning.