THE IMPACT OF THE DIGITAL ECONOMY ON RENEWABLE ENERGY CONSUMPTION AND GENERATION: EVIDENCE FROM EUROPEAN UNION COUNTRIES

Abstract

The article aims to provide an empirical investigation of the relationship between the digital economy and renewable energy consumption and generation based on a panel data analysis of 25 European Union (EU) countries for the period 2017–2021. The results indicate that the growth of the digital economy positively influences the transition to clean energy. At the same time, the control variables do not behave uniformly. Thus, urbanization has the strongest positive effect on the transition to renewable energy sources (RES). Carbon dioxide emissions also have a positive effect on renewable energy consumption and generation. However, an increase in primary energy consumption per capita leads to a decrease in the production and consumption of RES. Thus, while there is a positive relationship between the digital economy and the transition to RES, there is an ambiguous impact of urbanization, carbon emissions, and primary energy consumption on green energy in the EU.