Factors Influencing the Renewable Energy Consumption in Selected European Countries

Jan Polcyn, Yana Us, Oleksii Lyulyov, Tetyana Pimonenko and Aleksy Kwilinski
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Jan Polcyn: Department of Economics, Stanisław Staszic University of Applied Sciences in Pila, 64-920 Pila, Poland
Yana Us: Department of Finance and Entrepreneurship, Sumy State University, 40007 Sumy, Ukraine
Tetyana Pimonenko: Department of Finance and Entrepreneurship, Sumy State University, 40007 Sumy, Ukraine
Aleksy Kwilinski: The London Academy of Science and Business, London W1U 6TU, UK

Energies, 2021, vol. 15, issue 1, 1-27

Abstract: The overcoming of the issues on energy crisis and inequality have become the priorities as far developing as developed countries are concerned. Moreover, energy inequality has increased due to the shortage of natural gas and rising energy prices in retaliation to the economic recovery affected by the COVID-19 pandemic. This study aims to verify the linkage between the growth of renewable energy consumption and the country’s economic advancement. In this context, this paper determines the main driving forces of renewable energy consumption in European countries during 2000–2018. The annual data for panel regression analysis are retrieved from the OECD. Stat and World Bank Open Data. This empirical analysis employed a set of estimation procedures such as the panel unit root test (Levin, Lin & Chu; Im, Pesaran, Shin W-Stat; ADF-Fisher Chi-square; and PP-Fisher Chi-square methods), the Pearson correlation, fixed- and random-effects models, generalized method of moments (GMM), Hausman and the robustness tests. The results from the Hausman test ratified that the fixed-effects regression model is more suitable for involved panel balanced data. The results of fixed-effects regression and GMM identified the statistically significant and positive relationship between the share of renewable energy consumption of total final energy consumption, GDP per capita, and CO 2 emissions per capita for the overall sample. In turn, the total labor force, the gross capital formation, and production-based CO 2 intensity are inversely related to renewable energy consumption. The identified effects could provide some insights for policymakers to improve the renewable energy sector towards gaining sustainable economic development.

Keywords: sustainability; renewable energy; energy security; economic growth; panel data regression; fixed and random effects; GMM (search for similar items in EconPapers)
JEL-codes: Q Q0 Q4 Q40 Q41 Q42 Q43 Q47 Q48 Q49 (search for similar items in EconPapers)
Date: 2021
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Citations: View citations in EconPapers (7)

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