This study investigates the role of energy consumption and renewable energy in Indonesia’s economic growth from 2000 to 2022 using a literature review approach. As one of the largest emerging economies in Southeast Asia, Indonesia’s development heavily relies on energy, particularly fossil fuels such as coal and oil. However, the increasing global commitment to sustainability and climate change mitigation has pushed the country to shift toward renewable energy sources. This paper reviews previous empirical studies, policy reports, and relevant academic literature to explore the dynamics between energy use and economic output in both short- and long-term contexts.The review finds that conventional energy consumption has a strong and positive relationship with Indonesia’s GDP growth. Meanwhile, renewable energy, although rapidly developing in recent years, still plays a limited role in driving economic performance due to barriers such as infrastructure limitations, regulatory uncertainty, and lack of investment. Several studies using econometric models, including the Vector Error Correction Model (VECM), support the existence of long-run equilibrium relationships among energy variables and economic growth. The study concludes that to ensure sustainable growth, Indonesia needs to strengthen its energy policy framework, enhance incentives for renewable energy development, and improve energy efficiency across sectors. Future research should further explore the causal direction of these relationships using more robust data and methods.
Abdul Hakim (Tue,) studied this question.