ALTERNATIVE ENERGY CONSUMPTION AND ECONOMIC GROWTH IN NIGERIA

Abstract

This study analysed the disaggregated and combined effects of renewable and fossil energy consumption on economic growth in Nigeria. Results based on a bounds test cointegration analysis and the ARDL suggest that conventional energy consumption is a strong driver of growth in the long run. A 1% increase in conventional energy consumption will lead to a 0.056% increase in economic growth. This implies that fossil fuel energy consumption plays a significant role in improving economic growth, thereby confirming the existence of the growth hypothesis in Nigeria.Renewable energy consumption, on the other hand, has a negative coefficient both in the short and long run. The result shows that a 1% increase in renewable energy consumption would reduce economic growth by 0.09% in the long run. This implies that renewable energy policy should be focused on a comprehensive examination of an optimal energy portfolio that can sustainably drive economic growth.