THE IMPACT OF RENEWABLE ENERGY GENERATION ON PRODUCTIVITY IN SELECTED DEVELOPING COUNTRIES

Abstract

This study is an empirical analysis of the impact of renewable energy generation on productivity in seven countries in the South African Development Community (SADC). The study operationalizes the alternative hypothesis that renewable energy generation exerts an impact on productivity in the SADC from 1990 to 2019. The study contributes to the literature by employing renewable energy generation as the independent variable, and not renewable energy consumption, which is the case in most studies. The empirical analysis was employed using the panel autoregressive distributed lag (ADRL) model (da Silva, Cerqueira, & Ogbe, 2018). It was established that renewable energy generation had a significant and positive impact on productivity, as measured by gross domestic product (GDP), over the long term. Countries should implement policies aimed at increasing electricity generation from renewable energy sources in order to meet the growing demand for electricity. Infrastructure development, skills training, technical support, and a Just Energy Transition should be the primary emphasis of policy initiatives.