A Portrait of Renewable vs. Non-Renewable Energy in Indonesia's Economic Dynamics
Keywords:
Renewable Energy,, Economic Growth,, IndonesiaAbstract
The National Energy Policy has been established in Indonesia since 2014 in government regulation No. 79, after a series of top-down debates since 2010. Although KEN focuses on energy supply, the shift of energy policy to the demand side of energy has not been fully accommodated. This study aims to examine the movement of renewable and non-renewable energy towards Indonesia's economic growth from 1990 to 2023. Quantitative method with Error Correction Model (ECM) statistical test is used in this study which is useful to test the short-term and long-term relationship between variables. The results show that non-renewable energy consumption (CONRE) has a positive and significant impact on economic growth by 6.15%, while renewable energy in the form of electricity (REFE) also has a positive and significant effect of 7.19%. However, renewable energy in water resources (REWR) does not have a significant positive impact in the long run of 0.19%. In the short term, non-renewable energy consumption (CONRE) has a positive and significant effect on economic growth of 6.43%, while both renewable energy (RE) for electricity 0.075% and water 0.071% it is indicated to show no significant impact. From these findings, researchers propose how important it is for the government to optimize the potential of renewable energy to achieve a more environmentally friendly energy policy while still considering aspects outside the variables of this study.
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