Efficiency of Renewable Energy Potential Utilization in European Countries

The transition to renewable energy sources (RES) is crucial for achieving a low-carbon future and sustainable development. Reduction of greenhouse gas emissions is a priority goal in the European Union (EU) which actively promotes the development and use of renewable energy sources. This study evaluates the efficiency of EU countries in utilizing their geographical potential for wind and solar energy production. A two-stage radial network data envelopment analysis (NDEA) is proposed to estimate the efficiency of the utilisation of natural resources. The relationship between environmental potential and installed power capacity is evaluated in the first stage. In the second stage, the actual production from installed capacity is analysed. The efficiency trends over time are investigated. This approach offers a comprehensive assessment by considering both technical performance and environmental constraints. The results reveal that the development of alternative energy sources and the efficiency of the use of installed power capacity are not always in line with environmental conditions. The article's results highlight the necessity of a comprehensive approach to power capacity development basing on the renewable energy sources.