Abstract

The New Normal following the outbreak of the war in Ukraine highlights a new dimension of the energy sector: its strategic importance for economic stability and energy security. This study assesses the socio-economic determinants of renewable electricity production in 27 European Union member states over the period 2000–2024. More specifically, it examines whether innovation capacity, research and development expenditure, energy-use efficiency, and selected macroeconomic and demographic factors are associated with annual renewable-production growth at different points of its distribution. The dependent variable is renewable electricity production, while the main determinants capture innovative capacity, research and development (R&D) expenditure, and energy-use efficiency, complemented by macroeconomic and demographic controls. Using the panel dataset, we estimate two-way fixed-effects recentered-influence-function regressions and a pooled Common Correlated Effects specification, with Driscoll–Kraay inference as a robustness exercise. The Two-Way Fixed Effects (TWFE) and Driscoll–Kraay results indicate positive associations of energy-use efficiency at several middle quantiles, alongside negative consumption associations, while population growth is positive at Q90. These findings suggest that efficiency improvements may facilitate renewable-production growth, whereas rapid increases in household demand may temporarily outpace additions to renewable capacity. The positive population-growth coefficient at Q90 also indicates that demographic expansion may support renewable growth when accompanied by adequate infrastructure and urban planning. The CCE-RIF coefficients are not statistically significant at conventional levels, indicating that the conclusions are sensitive to allowing for heterogeneous responses to common shocks. From a policy perspective, the findings support an integrated approach combining energy-efficiency measures, demand-side management, grid modernization, storage investment, and the coordination of demographic development with renewable-energy infrastructure.