Assessing the Role of Renewable Energy in the Sustainable Economic Growth of the European Union

Abstract

The adoption of renewable energy sources offers significant economic and sustainability benefits. These sources—solar, wind, hydro, biomass, and geothermal—are crucial for transitioning to a sustainable, low-pollution energy model. Key benefits of renewable energy include job creation, reduced energy costs, decreased reliance on imported resources, minimized environmental impact, and long-term economic stability. Renewable energy also plays a vital role in achieving environmental and sustainability goals. By reducing dependence on imported energy resources, it enhances energy security. Countries investing in renewables lower their reliance on international supply chains and geopolitical risks, which is particularly relevant for European Union nations historically dependent on energy imports. Domestic renewable energy resources help stabilize prices and ensure a consistent long-term energy supply. This study aimed to assess the impact of renewable energy sources on the economy and sustainable development in the European Union. Data for all variables were collected from the Eurostat database. The unbalanced panel data sample consisted of 27 EU countries (N = 27), covering the period 2001–2022 (T = 22). The analysis and generalization of the scientific literature compared theoretical and practical statements, econometric models, and the least squares method. Here, the hypothesis that “the transition to renewable energy sources will have a smaller negative impact on economic growth when the country is more dependent on imported energy sources” was accepted, and this means that using renewable energy sources not only contributes to environmental goals and climate change mitigation but also provides various economic benefits, including job creation, lower energy prices, greater energy security, and long-term sustainability. It is essential in the transition to a cleaner and more sustainable economy.