SDG7 and renewable energy consumption: The influence of energy sources

Abstract

The transition to renewable energy poses a significant contemporary challenge. To address this, understanding the determinants of this transition is pivotal. This study examines renewable energy consumption in the Eurozone from 2000 to 2019 using panel data analysis and the Driscoll-Kraay technique with time-fixed effects. Two models test: one with aggregated energy production data and another with disaggregated data. Confirming existing literature, a strong inverse association emerges between GDP and renewable energy consumption. A negative relationship arises between Foreign Direct Investment (FDI), energy imports, and renewable energy consumption. Moreover, a direct, robust correlation exists between R&D expenditure and renewable energy consumption. When comparing the two models, the consumption of renewable energy shows a significant association with both the overall volume of electricity production and volumes differentiated by energy sources. Notably, the relationship proves more pronounced in the disaggregated data model. Disaggregated data by energy type provides higher explanatory power, underscoring its value for future studies. Consequently, this study underscores the heightened accuracy and reliability of using disaggregated energy production data in understanding the renewable energy transition.