Digitalization and Energy in Attaining Sustainable Development: Impact on Energy Consumption, Energy Structure, and Energy Intensity

Abstract

The relentless advancement of digital technologies has the potential to significantly reshape the energy landscape as digital technologies become increasingly integrated into diverse sectors of the economy. This study explores the intricate relationship between digitalization and energy in EU countries, focusing on its direct and indirect impacts on energy consumption, structure, and intensity. Furthermore, this study explores the mediating mechanisms that facilitate these changes, including the role of technological innovation and government efficiency in the relationship between digitalization and energy outcomes. Focusing on EU countries and using the system-GMM method, this research accounts for the heterogeneity in the impact of digitalization on energy across various member states. It examines the varying effects in different countries, considering their income levels, environmental regulations, and green investments. The results demonstrate that the strategic deployment of digitalization in EU countries substantially benefits the energy sector. By optimizing energy consumption and enhancing the energy structure through the integration of renewable sources, the EU could move closer to its sustainability objectives.