The effect of renewable energy consumption on economic growth: The case of Türkiye

Energy is used in almost all fields and thus it stands out as an indispensable resource at the present time. In parallel with the developments in the modern world, the need for energy is increasing day by day. In this context, having energy resources, which is one of the most important dynamics of economic growth, seriously affects the competition between countries. On the other hand, sudden price movements and crises in global energy markets lead countries to seek alternative sources. Renewable energy has been drawing attention among these alternatives recently. Since fossil fuels both harm the environment and their prices are relatively high, the trend of producing energy with renewable sources continues to increase. In this context, examining the relationship between renewable energy and economic growth results in researchers turning to this field. From this point of view, in this study, the effects of renewable energy consumption on economic growth and the effects of economic growth on renewable energy consumption are examined and modelled separately. In the study, ARDL Bounds Test method, which is a time series analysis, is used by using annual data covering the period of 1982-2021. First, a model was created in which renewable energy consumption is used as a dependent variable. According to the results obtained from this model, the increase in GDP has been found to have a positive effect on renewable energy consumption in the short and long term. In the second model, in which the GDP parameter was determined as the dependent variable, it was concluded that the increase in renewable energy consumption increased the GDP for the short and long term. According to the empirical findings of the study, the most important difference between the two models is that the effect of increases in GDP on renewable energy is greater than the effect of increase in renewable energy consumption on GDP. Therefore, based on the relevant period data for Turkey, it is deduced that the economic growth performance should be increased in order for renewable energy to become more widespread.