National Energy Security: An Analysis of Economic Growth and Energy Consumption at the Regional Level in Indonesia

Anna Yulianita, Siti Rohima, Mardalena, Lisa Hermawati

Universitas Sriwijaya, Palembang, Indonesia

Abstract

Regional energy security is a critical component in ensuring sustainable development in Indonesia, a country with diverse geographical and economic characteristics. In 2022, more than half of Indonesia’s final energy consumption was concentrated in the Java-Bali region, highlighting regional disparities in energy use. This study aims to analyze the relationship between regional energy consumption and economic growth across Indonesia’s major islands—Sumatra, Java, Bali & Nusa Tenggara, Sulawesi, and Maluku & Papua. Specifically, the study tests three main hypotheses: the growth hypothesis (energy consumption drives economic growth), the conservation hypothesis (economic growth leads to increased energy consumption), and the neutrality hypothesis (no significant causality between the two). Using panel data and the Granger Causality test technique, the study categorizes regional behavior to identify specific patterns of causality. The results support the growth hypothesis in most regions, where increased energy consumption, particularly electricity usage, significantly contributes to regional economic growth. In Bali & Nusa Tenggara, where the economy relies heavily on tourism and services, the conservation hypothesis is more applicable, suggesting that economic activity drives energy demand. In contrast, the Maluku & Papua region exhibits the neutrality hypothesis, with weak or no causal relationship between energy consumption and economic growth. These findings offer both theoretical and practical implications: they reinforce the importance of regional energy planning in economic policy and highlight the need for tailored energy strategies to suit the specific dynamics of each region. Understanding these regional patterns provides essential input for policymakers to design equitable and efficient energy distribution frameworks.

Keywords

energy security; economic growth; energy consumption; Granger causality; neutrality hypothesis

JEL classification

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Acknowledgements

The authors would like to express sincere gratitude to colleagues and mentors at the Faculty of Economics, Universitas Sriwijaya, for their valuable feedback and support in the preparation of this article.

Special thanks are extended to the anonymous reviewers whose constructive comments and suggestions greatly improved the quality of this work.

This research was supported by the Universitas Sriwijaya under the Competitive Scheme Program of the Faculty of Economics. The authors acknowledge this funding with great appreciation, as it played a crucial role in facilitating this study.

About Authors

Anna Yulianita

S.E., M.Si, Lecturer and Head of the Master’s Program in Economics, Faculty of Economics, Universitas Sriwijaya, Palembang, Indonesia (Srijaya Negara Street, Bukit Lama, Kec. Ilir Barat I, Palembang, South Sumatra 30139, Indonesia); ORCID https://orcid.org/0000-0001-8744-3274 e-mail: anna_fe@rocketmail.com

Siti Rohima

S.E., M.Si, Lecturer, Faculty of Economics, Universitas Sriwijaya, Palembang, Indonesia (Srijaya Negara Street, Bukit Lama, Kec. Ilir Barat I, Palembang, South Sumatra 30139, Indonesia); ORCID https://orcid.org/0000-0002-9196-7924 e-mail: sitirohima@unsri.ac.id

Mardalena

S.E., M.Si, Lecturer, Faculty of Economics, Universitas Sriwijaya, Palembang, Indonesia (Srijaya Negara Street, Bukit Lama, Kec. Ilir Barat I, Palembang, South Sumatra 30139, Indonesia); ORCID https://orcid.org/0000-0002-3170-8154 e-mail: mardalena@fe.unsri.ac.id

Lisa Hermawati

S.Pd., M.Si, Doctoral Student in Economics, Universitas Sriwijaya, Palembang, Indonesia (Srijaya Negara Street, Bukit Lama, Kec. Ilir Barat I, Palembang, South Sumatra 30139, Indonesia); ORCID https://orcid.org/0009-0001-5824-7052 e-mail: lisaherawatitijikdin@gmail.com

For citation

Yulianita, A., Rohima, S., Mardalena, Hermawati, L. (2025). National Energy Security: An Analysis of Economic Growth and Energy Consumption at the Regional Level in Indonesia. Journal of Applied Economic Research, Vol. 24, No. 2, 415-437. https://doi.org/10.15826/vestnik.2025.24.2.014

Article info

Received November 15, 2024; Revised April 6, 2025; Accepted April 14, 2025.

DOI: https://doi.org/10.15826/vestnik.2025.24.2.014

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