Korean Energy Economic Review ISSN:1599-7057(Print) 에너지경제연구

This paper estimates the long-run energy demand function by a cointegration approach, and forecasts energy demands until 2035. Cointegration tests verify that there is a cointegration relationship among energy consumption per capita, real GDP per capita, and energy price. DOLS estimation result shows that the elasticities of real GDP per capita and energy price are 1.06 and -0.30 respectively, and their statistical significances are also high. Demand forecasts based on the DOLS estimation exhibits generally similar pattern with the Second National Energy Plan. In addition, it is confirmed that a small change in the assumption about GDP growth rate brings a relatively large difference in the long-run energy demand forecast.