Abstract

Indonesia's economic growth is influenced by various factors, one of which is energy consumption. This study aims to analyze the influence of renewable energy consumption and non-renewable energy consumption on Indonesia's economic growth in the period 1990–2024. The problem raised in this study is how renewable energy consumption and non-renewable energy affect Indonesia's economic growth, both in the long and short term. This study uses a quantitative approach with secondary data based on time series sourced from the World Bank and the BP Statistical Review of World Energy. The analytical method used is the Error Correction Model (ECM) preceded by the Augmented Dickey-Fuller (ADF) stationarity test, long-term estimation with Ordinary Least Square (OLS), and the Engle-Granger cointegration test. The results show that in the long term, renewable energy consumption has a negative and significant effect on economic growth (coefficient -2.443; prob. 0.0110), while non-renewable energy consumption has a positive and significant effect (coefficient 5.009; prob. 0.0199). In the short term, both variables have no significant effect on economic growth. The Error Correction Term (ECT) coefficient of -0.5955 indicates a rate of adjustment towards long-term equilibrium of 59.54% per period. This study concludes that the Indonesian economy remains heavily reliant on fossil fuels in the long term, while renewable energy development is still in its infancy and requires significant investment, thus not having a direct positive impact on economic growth.

Keywords: Renewable Energy Consumption, Non-Renewable Energy Consumption, Economic Growth, Error Correction Model, Indonesia