GM

The aim of this paper is to develop a prediction model of energy demand of Iran’s industrial sector. For that matter a Markov Chain Grey Model (MCGM) has been proposed to forecast such energy demand. To find the effectiveness of the proposed model, it is then compared with Grey Model (GM) and regression model. The comparison reveals that the MCGM model has higher precision than those of the GM and the regression. The MCGM is then used to forecast the annual energy demand of industrial sector in Iran up to the year 2020. The results provide scientific basis for the planned development of the energy supply of industrial sector in Iran.