Document Type : Original Research

Authors

1 M.Sc. Student, School of Industrial Engineering, Islamic Azad University, South Tehran Branch, Tehran, Iran

2 Assistant Prof. School of Industrial Engineering, Islamic Azad University, South Tehran Branch, Tehran, Iran

Abstract

Energy as a production process input has an effective role on economic indicators such as gross domestic production (GDP). Limitations in fossil fuel and nuclear energy sources urge utilizing renewable energies. In this paper, the impact of renewable energy consumption on economic welfare indicators (i.e. GDP, GDP per capita, annual income of urban households, and annual income of rural households) is investigated. For this purpose, 41 annual data sets are collected, from 1971 to 2011, mostly from Iran’s Statistical Yearbook and Iran’s Balance Sheet. Artificial neural networks (ANNs) are used for forecasting the effect of renewable energy consumption on economic welfare indicators. Advantages in using the proposed ANN-based method are demonstrated by comparing its results with the multi-layer regression (MLR) model. The comparison between the artificial neural network and the multi-layer regression model demonstrates that the artificial neural network has more accurate results than the multi-layer regression model. Both ANN and MLR models show significant effect of using renewable energies on the economic welfare. Results demonstrate the importance of using the proposed model for policy makers in implementing new policies for renewable energies. The ANN prediction results show that GDP, GDP per capita, annual income of urban households, and annual income of rural households will grow by 35.63%, 62.59%, 167.61% and 143.19%, respectively, from 2007 to 2016.

Keywords

Aghaei, M., Sadeghi, H., Agheli, L., Ghanbari, A. (spring 2012). The relationship between energy consumption and economic growth in Iran by panel co-integration model. Iranian Quarterly Journal of Economics Modeling (Shahid Beheshti University), 148-185.
Amini fard, A., Daneshmand, M. (2013). The impact of renewable energy on economic welfare in Iran. The First Iranian National Clean Energy Conference.
Apergis, N., Payne, J. (2010). Renewable energy consumption and growth in Eurasia. Energy Economics 32, 1392–1397.
Aqeel, A., Sabihuddin Butt, M. (2001). The relationship between energy consumption and economic growth in Pakistan. Asia-Pacific Development Journal 8, 101-110.
Asafu-Adjaye, J. (2000). The relationship between energy consumption, energy prices and economic growth: time series evidence from Asian developing countries. Energy Economics 22, 615-625.
Azadeh, A., Babazadeh, R., Asadzadeh, SM. (2013). Optimum estimation and forecasting of renewable energy consumption by artificial neural networks. Renewable and Sustainable Energy Reviews 27, 605–612.
Baranzini, A., Weber, S., Bareit, M., Mathys, N.A. (2013). The causal relationship between energy use and economic growth in Switzerland. Energy Economics 36, 464-470.
Belk, A., Dobnik, F., Dreger, Ch., 2011. Energy consumption and economic growth: New insights into the cointegration relationship. Energy Economics 33, 782–789.
Chien, T., Hu, J. (2007). Renewable energy and macroeconomic efficiency of OECD and non-OECD economies. Energy Policy 35, 3606–3615.
Ekonomou, L. (2010). Greek long-term energy consumption prediction using artificial neural networks. Energy 35, 512–517.
Ermis, K., Midilli, A., Dincer, I., Rosen, M.A. (2007). Artificial neural network analysis of world green energy use. Energy Policy 35, 1731–1743. 
Fang, Y. (2011). Economic welfare impacts from renewable energy consumption: The China experience. Renewable and Sustainable Energy Reviews 15, 5120– 5128.
Fotros, M.H., Aghazadeh, A., Jebreili, S. (2011). The impact of economic growth on renewable energy consumption in OECD and non-OECD countries. Iranian Book of Economic Research and Policies 60, 81-98.
Fotros, M.H., Aghazadeh, A., Jebreili, S. (2012). Investigating the impact of renewable and non-renewable energy consumption on economic growth in developing countries. Iranian Book of Energy Economics 32, 51-72.
Fraser, I. (2002). The Cobb-Douglas production function: An antipodean defense. Economic Issues 7, Part 1, 39-53.
Inglesi-Lotz, R. (2013). The Impact of Renewable Energy Consumption to Economic Welfare: A Panel Data Application. University of Pretoria. Working paper.
Jha, G.K. Artificial neural network. Indian Agriculture Research Institute, Pusa, New Delhi.
Lee, Ch. (2005). Energy consumption and GDP in developing countries: A cointegrated panel analysis. Energy Economics 27, 415– 427.
Lehr, U., Lutz, Ch., Edler, D. (2012). Green jobs? Economic impacts of renewable energy in Germany. Energy Policy 47, 358–364. 
Sadorsky, P. (2009). Renewable energy consumption and income in emerging economies. Energy Policy 37, 4021–4028.
Salim, R.A., Hassan, K., Shafiei, S. (2014). Renewable and non-renewable energy consumption and economic activities: Further evidence from OECD countries. Energy Economics 44, 350-360.