An analysis of the main driving factors of renewable energy consumption in the European Union

Abstract

Climate change is a major global concern closely related to the strategies aimed at reducing energy consumption and increasing energy efficiency. Over the last decades, the interest in the development of renewable energy (RE) has grown exponentially. In the case of the European Union (EU), the Renewable Energy Directive sets rules to achieve a 32% of total energy consumption to be covered through RE by 2030. In order to achieve this goal, it is important to know what are the main driving factors of RE consumption (REC). This study aims to analyze the impact of economic and social factors on the share of REC in total energy consumption in the EU over the period 2001–2015. For doing so, we estimate a Panel Corrected Standard Error (PCSE) model. The results obtained show that economic factors have a negative effect on REC. In contrast, social factors like education exert a positive effect. This suggests that it is necessary to adopt a holistic approach that includes not only economic but also social aspects in order to foster REC.