Long-Run Cointegration Between Energy Consumption, Renewable Energy Deployment, and Economic Development in Nigeria: Panel Evidence

The long-run relationships between energy consumption, renewable energy deployment, and economic development in Nigeria are theoretically important for determining whether Nigeria's energy transition can be achieved without constraining economic growth, yet the evidence base combining cointegration econometrics with explicit disaggregation of renewable energy sources at the state panel level is underdeveloped. This study investigates long-run cointegration between energy consumption, renewable energy deployment indicators, and economic development outcomes in Nigeria using a state-level panel dataset spanning 36 states and the Federal Capital Territory over the period 2010 to 2023. Panel unit root tests accounting for cross-sectional dependence (CIPS and CADF tests), Westerlund panel cointegration tests, and Pooled Mean Group and Mean Group estimators are applied to characterise both long-run equilibrium relationships and short-run adjustment dynamics. Renewable energy deployment is measured through multiple indicators including solar capacity installed, households with solar access, mini-grid connection rates, and renewable energy share of total electricity supply. Results confirm cointegration between renewable energy deployment, total energy consumption, and state gross domestic product, with long-run elasticities indicating that renewable energy deployment is growth-neutral to mildly growth-enhancing when controlling for total energy access. The error correction mechanism shows rapid short-run adjustment, with deviations from long-run equilibrium corrected at a rate of 34 percent per quarter. The study contributes original methodological advances in addressing cross-sectional dependence in Nigerian state-level energy-economy panel analyses and provides evidence against the conservation hypothesis in Nigeria's renewable context. Keywords: cointegration, renewable energy, economic development, Nigeria, panel econometrics.