Renewable Energies: Economic and Energy Impact in the Context of Increasing the Share of Electric Cars in EU

Abstract

Renewable energies have an essential role in reducing various forms of pollution. The policymakers within the European Union place more and more emphasis on the replacement of internal combustion engine vehicles with electric vehicles in order to reduce emissions. The aim of this research is to analyze the current trends in producing and using renewable energy until 2028 and to estimate the impact of replacing the current internal combustion engine cars with electric cars. The significance of this study emerges from the estimation of the amount of electricity needed to replace current cars with electric cars and if it can be covered from green sources, based on the forecast of green energy until the year 2028. In addition, we also calculate in this study the impact on the public budgets of the European Union member states, as a result of the reduction of excise duties for fuels, following the reduction of their consumption. The research was carried out based on the extensive literature on the subject and data from Eurostat. The data used in this study are from 1990 to 2021. In this research we have used the IBM SPSS application with two of the most used forecasting algorithms: exponential smoothing model and autoregressive integrated moving average (ARIMA), based on the statistical analysis of the historical data. The estimated results showed that the replacement of traditional fuels will lead to an increase of 12.18% for electrical energy, and it could be covered 100% from green sources, if needed, even before 2028. There are many implications of this study for policymakers and the population. The results show that we still need policies to stimulate electricity production from renewable sources. There is a challenge regarding reducing government revenue due to fuel excises, which can be compensated by updating tax policies, with an impact on population and living standards. Furthermore, maintaining and adapting support schemes for electric cars, as well as expanding electric car infrastructure and smart grids are also challenges that need to be addressed by the policymakers and the industry.