Efficiency of Renewable Energy Potential Utilization in European Union: Towards Responsible Net-Zero Policy

Ewa Chodakowska, Joanicjusz Nazarko () and Łukasz Nazarko
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Ewa Chodakowska: Faculty of Engineering Management, Bialystok University of Technology, Wiejska 45A, 15-351 Bialystok, Poland
Joanicjusz Nazarko: Faculty of Engineering Management, Bialystok University of Technology, Wiejska 45A, 15-351 Bialystok, Poland
Łukasz Nazarko: Faculty of Engineering Management, Bialystok University of Technology, Wiejska 45A, 15-351 Bialystok, Poland

Energies, 2025, vol. 18, issue 5, 1-30

Abstract: This study evaluates the efficiency of EU countries in utilizing their geographical potential for wind and solar energy production. A two-stage radial network data envelopment analysis (NDEA) is used to estimate the efficiency of the utilization of natural resources. The research is of a computational-empirical nature on the basis of publicly available data. The basic variables included in the model are: mean wind speed, Global Horizontal Irradiance, population, land area, wind energy capacity, solar PV capacity, wind energy generation, and solar power generation. The relationship between the environmental potential and the installed power capacity is evaluated in the first stage. In the second stage, the actual production from the installed capacity is analyzed. The efficiency trends over time are also investigated. This approach offers a comprehensive assessment by considering both the technical performance and environmental constraints. Considering all studied countries together, a slight increase in the relative efficiency of renewable energy potential utilization is observed—from 23.2% in 2018 to 28.7% in 2022. Germany and the Netherlands achieved 100% relative efficiency in 2022. The results reveal that the development of alternative energy sources and the efficiency of the installed power capacity utilization are not always in line with the local environmental conditions. The average efficiency of the analyzed countries from this perspective was 26.8% in 2018, with an improvement to 37.4% in 2022. The relative efficiency of the installed capacity utilization was high in both periods (76.3% and 74.9%, respectively). The impact of exogenous variables on performance (GDP and R&D expenditures) is discussed. Broader implications of the results for a responsible renewable energy policy in the EU demonstrate the need to combine overarching targets with a flexible governance system. That flexibility should allow for individual energy transition pathways, cooperative mechanisms, market integration, and targeted funding in order to account for the diversity of renewable resource utilization potentials among countries.

Keywords: renewables; RES; efficiency; network DEA; wind power; solar power; energy; EU; resources; energy policy (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: 2025
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