Assessing the effects of low-carbon transition on energy poverty: Empirical evidence from selected EU member states

Abstract

In the energy transformation process of the European Union, the effects of the transition to renewable energy on energy poverty have been increasingly discussed in recent years. This study analyzed the effect of the change in the share of renewable energy on energy poverty between 2004 and 2022 in five leading countries of the European Union, namely Germany, France, Italy, Spain, and the Netherlands. The primary purpose of the research is to reveal the role of low-carbon energy transition in terms of social welfare and access to energy. The panel data analysis approach was used in the study; a fixed effects model covering countries and years was preferred. Participants were defined at the country level; renewable energy rate, energy import dependency, GDP per capita, and unemployment rate were included in the model as basic variables. The reliability of the model was checked using the Hausman test, Variance Inflation Factors (VIF), and Wooldridge autocorrelation test in the analyses. According to the findings, every 1 % increase in the share of renewable energy provides an average decrease of 0.2 % in energy poverty (p < 0.01). Energy poverty increases significantly as energy import dependency increases (p < 0.05). Socioeconomic indicators also have a significant impact on energy poverty. The findings have remained valid during crisis and pandemic periods. As a result, it has been revealed that energy transformation is important in terms of environmental sustainability, social justice, and welfare. This analysis provides an original and up-to-date contribution emphasizing sustainable energy policies' social impacts