Research article

Renewable energy and its impact on agricultural and economic development in the Netherlands and South Africa

  • Saul NGARAVA ,
  • Alois Aldridge MUGADZA
Expand
  • aCopernicus Institute of Sustainable Development, Faculty of Geosciences, Utrecht University, Utrecht, 3584 CB, the Netherlands
    bSchool of Natural Science, College of Health and Natural Science, University of Lincoln, Lincoln, LN6 7TS, the United Kingdom
    cFaculty of Law, The University of the West Indies, Cave Hill Campus, Bridgetown, BB11000, Barbados
    dGroningen Center for Energy Law, Faculty of Law, University of Groningen, Groningen, 9712 CP, the Netherlands
*E-mail address: s.ngarava@uu.nl (Saul NGARAVA).

Received date: 2024-10-03

  Revised date: 2025-01-08

  Accepted date: 2025-03-21

  Online published: 2025-05-21

Copyright

, 2025, 2666-660X/© 2025 Xinjiang Institute of Ecology and Geography, Chinese Academy of Sciences. Publishing services by Elsevier B.V. on behalf of KeAi Communications Co. Ltd. This is an open access article under the CC BY-NC-ND license (http://creativecommons.org/licenses/by-nc-nd/4.0/).

Abstract

The use of renewable energy is an important way to achieve sustainable agricultural and economic development. However, there are differences in access to renewable energy between the Global North and Global South. This study utilised an autoregressive distributed lag-error correction model and the data spanning from 1991 to 2021 to comparatively analyse the dynamic relationship among renewable energy consumption, the value of agricultural production, gross domestic product (GDP), economic diversification index, urban population, the total water extraction for agricultural withdrawal, and trade balance in the Netherlands and South Africa. In the short run, renewable energy consumption was increased by the value of agricultural production but decreased by GDP in South Africa. In the long run, renewable energy consumption and GDP increased the value of agricultural production, while the value of agricultural production also increased GDP in South Africa. However, in the Netherlands, there was no short- and long-run relationship between renewable energy consumption and agricultural and economic development. The results revealed that there was a short- and long-run relationship in South Africa. Moreover, in the Netherlands, the adjustment speed was -1.46 for renewable energy consumption with an error correction of 0.68 a (8.22 months). In South Africa, the adjustment speed was -1.28 for renewable energy consumption with an error correction of 0.78 a (9.38 months). Therefore, compared to South Africa, renewable energy consumption in the Netherlands takes less time to return to balance after a shock. These findings signify different trajectories on sectoral and economic transition initiatives spurred using renewable energy between the Netherlands and South Africa. Policy relating to initiatives such as “agro-energy communities” in Global South countries such as South Africa should be emphasised to promote the use of renewable energy in the agricultural sector.

Cite this article

Saul NGARAVA , Alois Aldridge MUGADZA . Renewable energy and its impact on agricultural and economic development in the Netherlands and South Africa[J]. Regional Sustainability, 2025 , 6(2) : 100209 . DOI: 10.1016/j.regsus.2025.100209

References

[1] ADB (African Development Bank), 2024. African Economic Outlook 2024: Driving Africa’s Transformation: The Reform of the Global Financial Architecture. [2025-01-04]. https://www.afdb.org/sites/default/files/2024/06/06/aeo_2024_-_country_notes.pdf.
[2] Ahlborg, H., Sj?stedt, M., 2015. Small-scale hydropower in Africa: Socio-technical designs for renewable energy in Tanzanian villages. Energy Res. Soc. Sci. 5, 20-33.
[3] Akizu, O., Urkidi, L., Bueno, G., et al., 2017. Tracing the emerging energy transitions in the Global North and the Global South. Int. J. Hydrog. Energy. 42(28), 18045-18063.
[4] Ali, Q., Anwar, S., Tariq, M., et al., 2023. Estimation of economic, environmental, and social efficiency for sustainable development in G-8 and SAARC countries: A data envelopment analysis. Environ. Sci. Pollut. Res. 30, 26819-26842.
[5] Apfel, D., Haag, S., Herbes, C., 2021. Research agendas on renewable energies in the Global South: A systematic literature review. Renew. Sust. Energ. Rev. 148, 111228, doi: 10.1016/j.rser.2021.111228.
[6] Aziza, S., Aktolkin, A., Erdal, B.F., et al., 2021. Analysis of the relationship between renewable energy and economic growth in selected developing countries. International Journal of Energy Economics and Policy. 11(1), 110-116.
[7] Bekele, G., Tadesse, G., 2012. Feasibility study of small Hydro/PV/Wind hybrid system for off-grid rural electrification in Ethiopia. Appl. Energy. 97, 5-15.
[8] Boix-Fayos, C., de Vente, J., 2023. Challenges and potential pathways towards sustainable agriculture within the European Green Deal. Agric. Syst. 207, 103634, doi: 10.1016/j.agsy.2023.103634.
[9] Briel, G., 2024. South Africa’s Draft Integrated Resource Plan Undermines its Climate Ambitions. [2024-08-24]. https://www.tralac.org/documents/blogs/5184-tralac-blog-briel-south-africa-s-draft-integrated-resource-plan-16012024/file.html.
[10] Busu, M., 2020. Analyzing the impact of the renewable energy sources on economic growth at the EU level using an ARDL model. Mathematics. 8(8), 1636, doi: 10.3390/math8081367.
[11] Chandio, A.A., Akram, W., Ozturk, I., et al., 2021. Towards long-term sustainable environment: Does agriculture and renewable energy consumption matter? Environ. Sci. Pollut. Res. 28, 53141-53160.
[12] Cloete, K., Pienaar, L., van der Merwe, M., 2023. Is persistent “loadshedding” pulling the plug on agriculture in the Western Cape, South Africa? Agrekon. 62, 228-240.
[13] CSIR (Council for Scientific and Industrial Research), 2021. Decoupling South Africa’s Development from Water Demand through a Circular Economy. [2025-01-04]. https://www.circulareconomy.co.za/wp-content/uploads/2021/11/8.-Water_CE-Briefing-Note.pdf.
[14] DALRD (Department of Agriculture, Land Reform and Rural Development), 2022. Economic Review of the South African Agriculture. [2024-08-01]. http://www.dalrrd.gov.za/phocadownloadpap/Statistics_and_Economic_Analysis/Statistical_Information/Economic%20Review%202021-22.pdf.
[15] Data Commons, 2024. Netherlands. [2024-08-01]. https://datacommons.org/place/country/NLD?utm_medium=explore&mprop=amount&popt=EconomicActivity&cpv=activitySource,GrossDomesticProduction&hl=en.
[16] Deka, A., Ozdeser, H., Seraj, M., et al., 2023. Does energy efficiency, renewable energy and effective capital promote economic growth in the emerging 7 economies? New evidence from CS-ARDL model. Futur. Bus. J. 9, 52, doi: 10.1186/s43093-023-00235-y.
[17] Destek, A.M., Aslan, A., 2017. Renewable and non-renewable energy consumption and economic growth in emerging economies: Evidence from bootstrap panel causality. Renew. Energy. 111, 757-763.
[18] DoA (Department of Agriculture), 2023. The Netherlands: A Model of Success in Agriculture. [2024-08-01]. https://hdoa.hawaii.gov/add/files/2024/06/Dutch-Ag-Success_03R2.pdf.
[19] DoME (Department of Minerals and Energy), 2002. White Paper on the Promotion of Renewable Energy and Clean Energy Development: Part One-Promotion of Renewable Energy. [2024-08-01]. https://www.gov.za/sites/default/files/gcis_document/201409/rewp2208022.pdf.
[20] DoMRE (Department of Mineral Resources), 2021. The South African Energy Sector Report. [2024-08-01]. https://www.dmre.gov.za/Portals/0/Energy_Website/files /media/explained/2021-South-African-Energy-Sector-Report.pdf.
[21] DoP (Department of the Presidency), 2011. National Development Plan. [2024-08-01]. https://www.nationalplanningcommission.org.za/National_Development_Plan.
[22] El-karimi, M., El-houjjaji, H., 2022. Economic growth and renewable energy consumption nexus in G 7 countries: Symmetric and asymmetric causality analysis in frequency domain. J. Clean. Prod. 342, 130618, doi: 10.1016/j.jclepro.2022.130618.
[23] European Commission, 2021. European Green Deal: Research & Innovation Call. [2024-08-01]. https://cinea.ec.europa.eu/funding-opportunities/calls-proposals/european-green-deal-research-innovation-call_en.
[24] European Commission, 2023. Common Agricultural Policy: 2023-27. [2024-08-19]. https://agriculture.ec.europa.eu/common-agricultural-policy/cap-overview/cap-2023-27_en#:-:text=It%20seeks%20to%20ensure%20a,adapt%20measures%20to%20local%20conditions.
[25] European Parliament, 2021. Climate Action in the Netherlands: Latest State of Play. [2024-08-01]. https://www.europarl.europa.eu/thinktank/en/document/EPRS_BRI(2021)696184.
[26] European Parliament and the Council of the European Union, 2021. Regulation (EU) 2021/ 2115 of the European Partliament and of the Council. [2024-08-01]. https://eur-lex.europa.eu/eli/reg/2021/2115/oj/eng.
[27] Eyuboglu, K., Uzar, U., 2022. Asymmetric causality between renewable energy consumption and economic growth: Fresh evidence from some emerging countries. Environ. Sci. Pollut. Res. 29, 21899-21911.
[28] Fadare, D.A., 2009. Modelling of solar energy potential in Nigeria using an artificial neural network model. Appl. Energy. 86(9), 1410-1422.
[29] Fadare, D.A., 2010. The application of artificial neural networks to mapping of wind speed profile for energy application in Nigeria. Appl. Energy. 87(3), 934-942.
[30] FAOSTAT (Food and Agriculture Organization of the United Nations), 2024. Agricultural Production. [2024-08-22]. https://www.fao.org/faostat/en/#data.
[31] Goldemberg, G., Coelho, S.T., Nastari, P.M., et al., 2004. Ethanol learning curve—the Brazilian experience. Biomass Bioenerg. 26(3), 301-304.
[32] GoN (Government of the Netherlands), 2011. Grean Deal. [2024-08-05]. https://www.iea.org/policies/5333-green-deals.
[33] GoN, 2016. Government Stimulates Biomass Energy. [2024-08-13]. https://www.government.nl/topics/renewable-energy/government-stimulates- biomass-energy.
[34] GoN, 2020. North Sea Energy Outlook Establishes Framework Conditions for Future Growth of Offshore Wind Energy. [2024-08-05]. https://www.government.nl/latest/news/2020/12/04/north-sea-energy-outlook-establishes-framework-conditions-for-future-growth-of-offshore-wind-energy.
[35] GoSA (Government of South Africa), 2024. Climate Change Act No. 22 of 2024. Pretoria, South Africa. [2024-08-05]. https://www.gov.za/sites/default/files/gcis_document/202407/50966climatechangeact222024.pdf.
[36] Harvard Kennedy School, 2024. Country and Product Complexity Rankings. [2024-08-01]. https://atlas.hks.harvard.edu/rankings.
[37] He, K., Shahzadi, I., Khan, S., et al., 2024. The dilemma of water, food, and greener energy nexus: A novel context of COP 27 for G20 economies. Land Degrad. Dev. 35(9), 2993-3006.
[38] Hlomendlini, H., 2025. It’s Time for Agriculture to Build Resilience-by Investing in Alternative Energy Sources. [2024-08-09]. https://hdl.handle.net/10520/ejc-farmweek_v2023_n23005_a5.
[39] Hofsetz, K., Aparecida, M., 2012. Brazilian sugarcane bagasse: Energy and non-energy consumption. Biomass Bioenerg. 46, 564-573.
[40] IEA (International Energy Agency), 2017. Renewable Energy Independent Power Producer Programme (REIPPP). [2024-08-05]. https://www.iea.org/policies/5393-renewable-energy-independent-power-producer-programme-reippp.
[41] IEA, 2021. Energy Systems of South Africa. [2024-08-05]. https://www.iea.org/countries/south-africa.
[42] IEA Bioenergy, 2021. Country Reports: Implementation of Bioenergy in South Africa- 2021 Update. [2024-08-05]. https://www.ieabioenergy.com/wp-content/uploads/2021/11/CountryReport2021_SouthAfrica_final.pdf.
[43] Jebli, B., Youssef, B., 2015. Renewable Energy Consumption and Agriculture: Evidence for Cointegration and Granger Causality for Tunisian Economy. [2024-08-01]. https://mpra.ub.uni-muenchen.de/68018/.
[44] Jolly, S., 2024. Conflicting actor narratives and institutional challenges for just energy transitions in the Global North and the Global South:Case of offshore wind energy in Norway and India. In: 5th Indian Public Policy Network Conference. Bombay: Indian Institute of Technology Bombay (IITB) India.
[45] Kaunda, C.S., Kimambo, C.Z., Nielsen, T.K., 2012. Potential of small-scale hydropower for electricity generation in Sub-Saharan Africa. Renew. Energy. 2012, 132606, doi: 10.5402/2012/132606.
[46] Komendantova, N., Patt, A., Barras, L., et al., 2020. Perception of risks in renewable energy projects: The case of concentrated solar power in North Africa. Energy Policy. 40, 103-109.
[47] Lin, Y., Mahmood, A.M., Meng, W.T., et al., 2024. Green economy transition in Asia Pacific: A holistic assessment of renewable energy production. J. Clean. Prod. 437, 140648, doi: 10.1016/j.jclepro.2024.140648.
[48] Mandal, K.G., Saha, K.P., Ghosh, P.K., et al., 2002. Bioenergy and economic analysis of soybean-based crop production systems in central India. Biomass Bioenerg. 23(5), 337-345.
[49] Molek-Kozakowska, K., 2023. The hybrid discourse of the ‘European Green Deal’: Road-mapping economic transition to environmental sustainability (almost) seamlessly. Crit. Discourse Stud. 21(2), 182-199.
[50] Nendissa, D.R., Iriany, A., Sui, J.M., et al., 2023. The role of renewable and nonrenewable energy on agricultural economics in Indonesia. International Journal of Energy Economics and Policy. 12(3), 352-360.
[51] Nfah, E.M., Ngundam, J.M., Tchinda, R., 2007. Modelling of solar/diesel/battery hybrid power systems for far-north Cameroon. Renew. Energy. 32(5), 832-844.
[52] Ngarava, S., Zhou, L., Monde, N., 2019. Gendered water insecurity: A structural equation approach for female headed households in South Africa. Water. 11(12), 2491, doi: 10.3390/w11122491.
[53] Ngarava, S., 2021. Relationship between economic diversification and CO2emissions: ARDL-EC modeling in South Africa ARDL-EC modeling in South Africa. Dev. Stud. Res. 8, 264-279.
[54] NLEA (Netherlands Enterprise Agency), 2023. Stimulation of Sustainable Energy Production and Climate Transition (SDE++). [2024-08-05]. https://english.rvo.nl/subsidies-financiering/sde.
[55] Nyoni, B., Phiri, A., 2020. Renewable energy: Economic growth nexus in South Africa: Linear, nonlinear or non-existent? Int. J. Energy Econ. Policy. 10, 635-644.
[56] Omri, A., Ben, N., Sassi-tmar, A., 2015. Modeling the causal linkages between nuclear energy, renewable energy and economic growth in developed and developing countries. Renew. Sust. Energ. Rev. 42, 1012-1022.
[57] Pesaran, M.M., Shin, Y., 1997. An autoregressive distributed lag modelling approach to cointegration analysis. In: Strom, S., (ed.). Econometrics and Economic Theory in 20th Century: The Ragnar Frisch Centennial Symposium. Cambridge: Cambridge University Press, 371-413.
[58] Pesaran, M.H., Shin, Y., Smith, R.J., 2001. Bounds testing approaches to the analysis of level relationships. J. Appl. Econom. 16(3), 289-326.
[59] REN21 (Renewable Energy Policy Network for the 21st Century), 2023. Renewables 2023 Global Status Report: Global Overview. [2024-08-12]. https://www.ren21.net/gsr-2023/modules/global_overview/.
[60] Saheb-koussa, D., Haddadi, M., Belhamel, M., 2009. Economic and technical study of a hybrid system (wind-photovoltaic-diesel) for rural electrification in Algeria. Appl. Energy. 86(7-8), 1024-1030.
[61] Shakouri, B., Khoshnevis Yzdi, S., 2017. Causality between renewable energy, energy consumption, and economic growth. Energy Sources, Part B Econ. Plan. Policy. 12, 838-845.
[62] ?imelyt?, A., Dudzevi?iūt?, G., 2017. Consumption of renewable energy and economic growth. In:5th International Scientific Conference on Contemporary Issues in Business, Management and Education. Vilnius, Lithuania, 11-12.
[63] Slusarczyk, B., Zegle, P., Kluczek, A., et al., 2022. The impact of renewable energy sources on the economic growth of Poland and Sweden considering COVID-19 times. Energies. 15(1), 332, doi: 10.3390/en15010332.
[64] Smolovic, J.C., Muhadinovi, M., Radonji, M., et al., 2020. How does renewable energy consumption affect economic growth in the traditional and new member states of the European Union? Energy Rep. 6(6), 505-513.
[65] Statista, Inc., 2023. 20 Countries with the Biggest Inequality in Income Distribution Worldwide in 2023, Based on the Gini Index. [2024-08-09]. https://www.statista.com/statistics/264627/ranking-of-the-20-countries-with-the-biggest-inequality-in-income-distribution/.
[66] Statista Inc., 2024a. Netherlands—Statistics and Facts. [2024-08-09]. https://www.statista.com/topics/2697/the-netherlands/.
[67] Statista Inc., 2024b. South Africa—Statistics and Facts. [2024-08-09]. https://www.statista.com/topics/3921/south-africa/.
[68] Statista Inc., 2025a. African Countries with the Highest Gross Domestic Product (GDP) in 2024. [2025-02-21]. https://www.statista.com/statistics/1120999/gdp-of-african-countries-by-country/#:-:text=South%20Africa's%20GDP%20was%20estimated,a%20high%20GDP%20per%20capita.
[69] Statista Inc., 2025b. Netherlands:Distribution of Gross Domestic Product (GDP) across Economic Sectors from 2013 to 2023. [2025-02-21]. https://www.statista.com/statistics/276713/distribution-of-gross-domestic-product-gdp-across-economic-sectors-in-the-netherlands/.
[70] Statista Inc., 2025c. South Africa:Distribution of Gross Domestic Product (GDP) Across Economic Sectors from 2013 to 2023. [2025-02-21] https://www.statista.com/statistics/371233/south-africa-gdp-distribution-across-economic-sectors/#:-:text=In%202023%2C%20agriculture%20had%20contributed,the%20total%20value%20added%2C%20respectively.
[71] Statistics Netherlands, 2024. Nearly Half the Electricity Produced in the Netherlands is Now Renewable. [2024-08-05]. https://www.cbs.nl/en-gb/news/2024/10/nearly-half-the-electricity-produced-in-the-netherlands-is-now-renewable.
[72] StatLine, 2024. Agriculture; Income and Labour Volume Structure, National Accounts. Statistical Netherlands. [2024-08-20]. https://opendata.cbs.nl/statline/#/CBS/nl/dataset/85933NED/table?ts=1741539162927.
[73] Sutherland, L.A., Peter, S., Zagata, L., 2015. Conceptualising multi-regime interactions: The role of the agriculture sector in renewable energy transitions. Res. Policy. 44(8), 1543-1554.
[74] Szabo, S., Bodis, K., Huld, T., et al., 2011. Energy solutions in rural Africa: Mapping electrification costs of distributed solar and diesel generation versus grid extension. Environ. Res. Lett. 6(3), 034002, doi: 10.1088/1748-9326/6/3/034002.
[75] Taliotis, C., Bazilian, M., Welsch, M., et al., 2014. Grand Inga to power Africa: Hydropower development scenarios to 2035. Energy Strateg. Rev. 4, 1-10.
[76] Tan, D.J., Alvarado, F.F., Alvarado, F., et al., 2022. The effects of environmental degradation on agriculture: Evidence from European countries. Gondwana Res. 106, 92-104.
[77] The European Parliament, 2009. Directive 2009/28/EC of the European Parliament and of the Council. [2024-08-05]. https://eur-lex.europa.eu/eli/dir/2009/28/oj/eng.
[78] Tugcu, T.C., Tiwari, K.A., 2016. Does renewable and/or non-renewable energy consumption matter for total factor productivity (TFP) growth? Evidence from the BRICS. Renew. Sust. Energ. Rev. 65, 610-616.
[79] Uche, E., Ngepah, N., 2024. How green-technology, energy-transition and resource rents influence load capacity factor in South Africa. Int. J. Sustain. Energy. 43, 1-19.
[80] UN (United Nations), 2015a. SDG 7: Ensure Access to Affordable, Reliable, Sustainable and Modern Energy for All: Targets and Indicators. [2024-08-08]. https://sdgs.un.org/goals/goal7.
[81] UN, 2015b. Sustainable Development Goal (SDG) 12: Ensure Sustainable Consumption and Production Patterns. [2024-08-08]. https://sdgs.un.org/goals/goal12#targets_and_indicators.
[82] UN, 2023. The Sustainable Development Goals Extended Report 2023. [2024-08-05]. https://sdgs.un.org/sites/default/files/2023-07/The-Sustainable-Development-Goals-Report-2023_0.pdf.
[83] Wageningen Economic Research, 2023. State of Agriculture, Nature and Food: Agricultural Businesses Increasingly Finding Additional Sources of Income. [2024-08-13]. https://www.wur.nl/en/research-results/research-institutes/social-economic-research/show-ser/state-of-agriculture-nature-and-food-agricultural-businesses-increasingly-finding-additional-sources-of-income.htm.
[84] Western Cape Government, 2018. Solar Energy in Agriculture. [2024-08-13]. https://www.westerncape.gov.za/110green/projects/green-agriportal-agriculture-launched.
[85] WITS (World Integrated Trade Solution), 2024. Trade Stats-Country at a Glance. [2024-08-05]. https://wits.worldbank.org/datadownload.aspx?lang=en.
[86] World Bank, 2024. World Development Indicators. [2024-08-05]. ttps://databank.worldbank.org/source/world-development-indicators.
[87] Zhang, X.L., Wang, X.L., Si, D.W., et al., 2024. Natural resources, food, energy and water: Structural shocks, food production and clean energy for USA in the view of COP27. Land Degrad. Dev. 35(7), 2602-2613.
Outlines

/