Renewable energy production capacity and consumption in Europe

Abstract

Faced with the prospect of achieving 32 % renewable energy (RE) consumption by 2030 and climate neutrality by 2050, Europe has embarked on a path of promoting the use of clean energy through policies and investments essential to its development. Against this backdrop, the aim of the present article is to analyse both RE production capacity and the determinants of RE consumption in a sample of 30 European countries for the period 2010-2019. Through the construction of a synthetic measure by the zero unitarization method, the four types of RE (hydro, wind, solar and biofuels) are jointly assessed, yielding a ranking of countries categorized as being in a favourable, fairly favourable, rather unfavourable, or unfavourable situation. Furthermore, the possible relationship between RE production capacity and consumption is estimated with a sample of panel data (fixed effects and random effects). The results show that Sweden (SM: 0.419), Austria (SM: 0.384) and the Netherlands (SM: 0.381) are at the top of the ranking, demonstrating their leadership in RE generation and providing a model to follow for Eastern European countries whose production levels are still well below average. Moreover, the study provides evidence that the RE production capacity (coefficient: 0.253***), low gas emissions (coefficient: -0.479***), energy productivity (coefficient: 0.333***), and the size of the country (coefficient: 0.016***) foster the use of RE. Overall, European countries are on the right track to achieve the goals set, although they may be progressing at different speeds.

Keywords: Europe; Panel data; Renewable energy; Synthetic measure.