Accuracy assessment of energy projections for China by Energy Information Administration and International Energy Agency

Abstract

Energy projections are of great importance to energy policies but have consistently shown noticeable and repeated errors, and thus require accuracy assessment for improvement. International Energy Outlook (IEO) of the US Energy Information Administration and World Energy Outlook (WEO) of the International Energy Agency publish widely used energy projections, whose accuracy for China – the largest energy consuming economy and carbon dioxide emitter – has been rarely explored. This study investigates accuracy of China's reference energy projections in the annual reports of IEO and WEO from 2004 to 2019. Results show that most projections in IEO and WEO underestimated China's total energy consumption, particularly over longer projection horizons. The use of coal, natural gas and renewable energy tended to be underestimated, and nuclear energy was overestimated. The errors of industry and transport sectors were comparable and higher than for the other sectors. WEO showed substantially better accuracy than IEO in projections of total energy consumption, primary energy resources (except for nuclear energy) and end-use sectors. Projection horizon, errors in projected population's size, oil price and gross domestic product per capita were four leading factors related to the projection errors and hence they require particular attention in future modeling. For policy makers, this study shows that, if IEO and WEO projections are used to guide the policy making, China needs more aggressive policies in order to achieve the carbon neutrality goal.