Energy security and renewable energy efficiency in EU

Abstract

The increasing concerns on both energy supply security and environmental issues promote the global awareness in renewable energy (RE). European Union (EU) is among the most vulnerable countries/unions due to her high-energy import dependency and scarcity in energy reserves. This study first empirically confirms the substitution effect of RE for energy imports, then benchmarks the performance of the selected EU countries in RE efficiency and productivity from 2004 to 2014 with a perspective of energy security. The results of the super-efficiency model of data envelopment analysis (DEA) reveal that the average efficiency of the selected EU countries is increasing during the analysis period. While Sweden, Germany, Spain, Belgium and Romania are among the efficiency leaders, conventional energy producers limit the RE in France and United Kingdom (UK). The results of the sequential Malmquist-Luenberger Index analyses show that average total factor productivity of the group has increased by 8.4% annually, where technological change (innovation) is the prime driver of the productivity growth. The findings of this study not only highlight the convergence within EU towards the common objectives for RE and energy security, but also the technological diffusion and knowledge spillover. The authors believe that the techniques of total factor productivity and efficiency analyses have crucial roles in analyzing the renewable energy efficiency levels and energy policies of the countries.