| Economic development cannot be separated from the support of the energy power. As a basic form of energy, electric power plays more and more important role in the national economy, that is, the national economy cannot be prosperity without the support from the electricity and the electric sector cannot be improved without the economic development as well. When our nation is deficient in electricity, various industry in national economy would be seriously affected and further depress the economic activity of the nation. As a critical part of economic infrastructure, Electricity power industry plays an important role for the production. As a result, the power consumption has become a key factor for the well-being of the national economy. For the Laos’s economic development considered, since it has inadequate electricity supply, there is a slow economic development. In order to solve this problem, there should be a proper scientific electricity supply management and guarantee there is no lack of electric power in the remote areas to meet the electricity demand in Laos. The purpose of this paper is to investigate the relationship between the power sector development and economic activity and to make a reasonable power sector development plan.The aim of this paper is to study the electric power sector and economic development of the nation with the time-series analysis method of econometrics. Firstly, the time-series method is used in analyzing the relationship between electric power consumption and economic growth, and the corresponding result shows that there is a long-term equilibrium relationship between them and there exists a one-way relation between the economic growth and the electric power consumption. Secondly, this paper further studies the relationship among three sectors that affect the GDP, say, agricultural industry, industrial industry, and services industry, respectively. By considering their electric power consumption and their value added, we find that there is a cointegration relationship between the value added and electric power consumption of agricultural industry and industrial industry. After that, the error-correction model is established. Finally, we examine the factors that affect to the electric power consumption by using multiple regression model and ridge regression model and find the best predictive model for electric power consumption. Based on above analysis, in terms of multiple regression model, the last two significant variables are GDP and electricity imports which can explain 99.5% for electric power consumption. Whereas in terms of ridge regression model, the last three significant arguments are GDP, population and electricity imports which can explain 99.6% for electric power consumption. With the help of quantitative analysis method, the relationship between the electric power sector and the nation’s economy is revealed. We don’t only understand the importance of electric power consumption in the nation’s economy, but also can forecast the electricity demand of Laos. And then, Laos electricity power construction has a practical significance and can be used effectively. |
