Renewable Energy Productivity Club Convergence in the European Union

ABSTRACT In this study, we analyze the productivity of renewable energy among the member countries of the European Union using the cluster convergence methodology using data spanning from 2004 to 2022. The significance of this research lies in the European Union's commitment to achieving the objectives outlined in the European Green Deal, particularly the target of reaching net‐zero emissions by 2050. In this context, we observe a decline in the productivity of renewable energy based on the GDP of member countries, attributed to the gradual increase in renewable energy consumption. We contextualize this process as a transition phase wherein the energy mix of these countries progressively incorporates higher proportions of renewable energy, reducing carbon dependency. The projection for the year 2030 indicates a continuation of this trend, with electricity prices and fossil fuel consumption significantly influencing productivity. We estimate the convergence of two clusters of countries that exhibit similar patterns. The most productive countries are those with lower renewable energy consumption, indicating their advanced stage in the transition process. To further enhance the productivity of renewable energy, we propose that the more productive countries, specifically Club 1, increase their consumption of renewable energy to standardize and solidify the progress toward achieving net‐zero emissions.