Forecasting Hydropower with Innovation Diffusion Models: A Cross-Country Analysis

Hydroelectric power is one of the most essential renewable energy sources in the world. In addition to generating electricity, hydropower offers other benefits such as flood control, irrigation assistance, and clean drinking water. In this study, we examine the evolution of hydropower in the context of energy transition with a forecasting analysis. We analyze time series data of hydropower generation from 1965 to 2023 and apply Innovation Diffusion Models as well as other models such as Prophet and ARIMA for comparison. The models are evaluated for different geographical regions, namely the North, South, and Central American countries, the European countries, and the Middle East with Asian countries, to determine their effectiveness in predicting trends in hydropower generation. The models' accuracy is assessed using Mean Absolute Error (MAE), Root Mean Squared Error (RMSE), and Mean Absolute Percentage Error (MAPE). Through this analysis, we find that, on average, the GGM model outperforms the Prophet and ARIMA models, and is more accurate than the Bass Model. This analysis underscores the critical role of precise forecasting in energy planning and suggests further research to validate these results and explore other factors influencing the development of hydroelectric generation.