THE ROLE OF RENEWABLE ENERGY IN EFFICIENCY OF GRDP GROWTH: A DEA APPROACH
Keywords:
DEA, Electricity, Renewable EnergyAbstract
Indonesia’s economy is currently still plagued by the Middle Income Trap—a country’s inability to sustain stable annual economic growth, as reflected in its GDP figures. Indonesia’s economic productivity also faces challenges related to the uneven distribution of economic development across provinces, as evidenced by disparities in regional GDP (PDRB). Given the global trend toward green innovations, such as renewable energy, this study aims to determine whether the level of utilization of renewable energy power plants in a province can enhance efficiency in regional GDP growth. The methods used to compare the efficiency levels of 38 provinces in Indonesia are DEA with an output-oriented approach and VRS, using inputs consisting of installed capacity of renewable energy power plants and installed capacity of non-renewable energy power plants, as well as output in the form of GRDP values. The results indicate that the slack in the installed capacity of non-renewable power plants tends to be higher (697,819 MW) than that of renewable power plants (359,729 MW). There are 5 provinces classified as efficient, but 3 provinces are considered outliers; thus, the truly efficient provinces are Yogyakarta Special Region and West Sulawesi, with a DEA efficiency score of 1. Efficient provinces tend to have a larger installed capacity of renewable power plants compared to non-renewable ones. Therefore, it is recommended that stakeholders intensify the use of renewable energy as the primary source of electricity generation to achieve more efficient economic growth and address regional GDP disparities
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