# Quantifying the credibility of energy projections from trends in past data: the U.S. Energy Sector

*Energy Policy*, February 1994, p. 119-130

## Abstract

For energy forecasts to be useful in modelling or in policy efforts, the associated
uncertainties must be known reliably. We analyse the actual errors in past forecasts
of over 170 energy producing and consuming sectors of the US economy. We find that the often
assumed normal distribution fails to model frequency of extreme outcomes (those lying far
from the mean) accurately. Triangular distributions perform even worse as they assign
zero probability to the outliers. We develop a simple one-parameter model that can
be used to estimate a probability distribution for future projections. In addition to
energy forecasts, our method can be applied to any field where a history of forecasting
is available.

#### Keywords: energy projections, forecasting, uncertainty

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