Real Price
As a neutral starting assumption it was decided to assume no change in the real price of electricity, that is to say that tariffs would be increased only to keep pace with inflation (this departs from what happened up to 1973 when the real price of electricity fell, largely because inflation eroded the price). results of the forecast have been used to assess the
After the
amount of new investment required and it is seen how this effects the costs, it may be necessary to adjust the assumption. However, different price assumptions are unlikely to alter the forecast by large amounts.
Population
The medium population projection of 2% p.a. was used for extrapolating the growth in population.
GDP
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Some further work has been done on the medium term
trend rate of growth of GDP to incorporate the effect of an expected decline in the growth of the labour force. Two trend growth paths of GDP are available. The higher one assumes that the declining growth in the labour force is not felt in this decade and in addition that
there is some compensation for the years of low average growth in the first half of the decade. The second assumes that the underlying growth of GDP is 6% p.a. in the second half of the 1970's and starts to decline in the first half of the 1980's until it reaches 4% by 1986. In either case 1977 has to be treated as part of the short term cyclical forecast.
A preliminary forecast of 8% has been used. Because the break in the trend of prices in 1973 may not be fully
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