Towards an Optimal Renewable Energy Mix for the European Union: Enhancing Energy Security and Sustainability

Abstract

Abstract This research investigates he optimal renewable energy mix for the European Union to enhance its energy security and sustainability. Using panel data from 2012 to 2022, covering 26 EU countries, the following estimation techniques are applied: ordinary least squares, fixed effect regression, and the two-step generalised method of moments. The findings highlight wind energy as a critical component in the EU’s energy strategy due to its consistently positive impact on the energy mix. The results also reveal challenges in integrating solar photovoltaic energy, largely due to regional disparities in solar irradiance and high initial infrastructure costs. Accordingly, foreign direct investment does not significantly impact the energy mix, suggesting a need for better alignment between investment flows and energy policies. In the context of past energy infrastructure decisions continuously influencing the current energy mix, we emphasise the importance of continuity in energy policy. These insights can inform policymakers in refining the EU’s energy strategy as the latter strives to meet its 2030 and 2050 climate and energy targets aligning with Sustainable Development Goal (SDG) 7 (Affordable and Clean Energy) and SDG 13 (Climate Action).