Application of extreme value probability asymptotic theory in China’s energy risk prediction

Abstract

Extreme value theory is a theory that deals with situations that are extremely far from the median of a probability distribution. It is often used to analyze situations with rare probabilities, such as earthquakes and floods that occur once in a hundred years. It is often used in risk management and reliability research. This article demonstrates some simple applications of extreme value asymptotic probability theory in predicting China's energy risks. First, the article introduces the main classical results of extreme value asymptotic probability theory, and demonstrates the method of using graphical methods to construct quantile graphs to calculate energy data, and gives examples of quantile graphs.The article calculates and analyzes the risks faced by China's major energy consumption and imports and exports in the past decade, and predicts the development trends of some energy economic indicators in China from 2023 to 2026 through quantile graphs constructed by extreme value asymptotic probability theory. The results show that the results predicted by the quantile diagram constructed by extreme value asymptotic probability theory are basically accurate, so extreme value asymptotic probability theory should be more widely used in the field of energy economic forecasting. Atthe same time, this article puts forward some suggestions in order to contribute to China's low-carbon sustainable development.