The theoretical part of this doctoral thesis determined the role and importance of energy in economic growth. According to the neoclassical economic theory, energy is not considered as a primary input. Instead it is looked upon as an intermediate good while members of the socalled ecological economics claim just the opposite. In the modern world, efficient energy supply, particularly electricity as its most flexible, commercial and cleanest form represents an important basis for economic growth and development. Theoretical and practical correlation between electricity and economic growth does not imply that there exists a causal relationship at the same time. This thematic area has been the subject of empirical research for the last two decades, although with no consensus on whether economic growth causes electricity consumption and production or whether electricity acts as a stimulus of economic growth. In the context of adjusting the Croatian electricity sector to the EU’s internal electricity market knowing the direction and intensity of causal relationship represents an important foundation for design and implementation of the appropriate economic and energy policy. The empirical part of the doctoral dissertation presents the research regarding interconnectedness (i.e. causality) between electricity consumption/production and economic growth in the Republic of Croatia. The aim of this research was to determine the direction and intensity of the causal relationship, on aggregate and sectoral level, between the electricity variables and GDP within a multivariate framework. The econometric analysis was conducted on previously formed three different models using the conventional multifactor neoclassical aggregate production function and an appropriate quantitative method (ARDL approach). In this doctoral dissertation it has been proven that there is a significant positive impact of electricity production and consumption (especially by the non-residential sector) on economic growth of the Croatian economy. The research results made it possible to formulate scientifically based proposals and measures for the development of Croatian electricity sector, as well as recommendations for future research.