Climate Change Scenarios for Paraguayan Power Demand 2017-2050


Although Paraguay has a surplus of electricity generation capacity, an underdeveloped electricity transmission and distribution infrastructure has constrained economic growth. The trajectory of future electricity demand is therefore important for planning purposes. We create electricity demand scenarios for Paraguay between 2017 and 2050 for two climatic scenarios, the Representative Concentration Pathways (RCPs) 4.5 (medium atmospheric CO2 concentration) and 8.5 (high atmospheric CO2 concentration), in combination with three socio-economic scenarios, the Shared Socio-economic Pathways SSP1, SSP3 and SSP5. Using historical climatic and socio-economic data from 1985 to 2010, we estimate an autoregressive distributed lag model for Paraguayan power demand with an in-sample Symmetric Mean Absolute Percentage Error (sMAPE) of 2.3% and an out-of-sample (2011-2016) ex-post sMAPE of 4.6%. We re-estimate the parameters on the full dataset 1985-2016 and produce electricity demand projections until 2050 for the selected scenarios. The scenarios show an increase in power demand until the period 2045, after which two of the six scenarios show a decline and the remainder continue increasing at a slower rate. The SSP1- and SSP5-based scenarios reach an annual demand of 65-80 TWh/year around 2045-2050, and the scenarios based on SSP3 reach an annual demand of 100-115 TWh/year around 2050. In addition to aid in energy planning, these scenarios may provide input to negotiations with neighbouring countries regarding Paraguay’s surplus generation capacity.

In Climatic Change.