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Kwilinski, A.; Lyulyov, O.; Pimonenko, T. Digital Business on Energy Efficiency in EU Countries. Encyclopedia. Available online: https://encyclopedia.pub/entry/49578 (accessed on 03 July 2024).
Kwilinski A, Lyulyov O, Pimonenko T. Digital Business on Energy Efficiency in EU Countries. Encyclopedia. Available at: https://encyclopedia.pub/entry/49578. Accessed July 03, 2024.
Kwilinski, Aleksy, Oleksii Lyulyov, Tetyana Pimonenko. "Digital Business on Energy Efficiency in EU Countries" Encyclopedia, https://encyclopedia.pub/entry/49578 (accessed July 03, 2024).
Kwilinski, A., Lyulyov, O., & Pimonenko, T. (2023, September 25). Digital Business on Energy Efficiency in EU Countries. In Encyclopedia. https://encyclopedia.pub/entry/49578
Kwilinski, Aleksy, et al. "Digital Business on Energy Efficiency in EU Countries." Encyclopedia. Web. 25 September, 2023.
Digital Business on Energy Efficiency in EU Countries
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This entry is adapted from the peer-reviewed paper 10.3390/info14090480

Digital business plays a crucial role in driving energy efficiency and sustainability by enabling innovative solutions such as smart grid technologies, data analytics for energy optimization, and remote monitoring and control systems. Through digitalization, businesses can streamline processes, minimize energy waste, and make informed decisions that lead to more efficient resource utilization and reduced environmental impact. 

e-commerce web sales digital economy sustainable development

1. Introduction

The rapid advancement of digital technologies and digital business models has reshaped various aspects of the world’s development. Digital business continues to expand across industries, and it becomes crucial to examine its implications for energy efficiency and sustainability [1][2][3][4][5][6]. Digital business encompasses a wide range of activities, including e-commerce, cloud computing, data analytics, Internet of Things (IoT) applications, and smart city initiatives, among others [7][8][9][10]. These technologies and business models have the potential to transform traditional energy systems [11][12][13], providing new avenues for energy management, resource optimization [14][15][16][17], and environmental stewardship [18][19][20][21][22]. However, the full implications of digital business on energy efficiency are multifaceted and require a comprehensive analysis. One of the key areas where digital business intersects with energy efficiency is through its influence on energy demand and consumption patterns [23][24][25]. For instance, the growth of e-commerce has significantly changed the way products are distributed and delivered, affecting logistics and transportation systems. Digital business facilitates the integration of renewable energy sources into the power grid, enabling more efficient management of energy generation and consumption, declining carbon dioxide emissions, and improving the well-being of society [26][27][28]. Smart grid technologies, coupled with advanced data analytics, enable real-time monitoring and control, demand response mechanisms, and grid optimization, leading to more sustainable and efficient energy systems. However, digital business also poses challenges to energy efficiency and sustainability. The rapid proliferation of digital devices, data centers, and communication networks has led to increased energy consumption and associated environmental impacts [29][30][31]. Furthermore, issues such as electronic waste management, cybersecurity risks, and the ethical use of data in digital business need to be addressed to ensure a sustainable digital future [32][33][34]. In addition, digitalization requires sufficient green financial resources [35][36][37][38] and relevant digital knowledge and skills [39][40][41][42][43][44][45][46][47][48][49][50]. To fully harness the potential of digital business for energy efficiency and sustainability, it is essential to identify best practices, technological innovations, and policy frameworks that can promote energy-efficient digital transformation.

2. Energy Efficiency Assessment

Scholars [51] conclude that energy efficiency plays a crucial role in decarbonizing economic development. The findings of energy efficiency assessments could be used to identify opportunities for energy savings and propose cost-effective solutions to enhance energy efficiency, which is the primary goal of sustainable development. It should be noted that scholars developed a vast range of approaches for assessing energy efficiency. Scholars [52][53][54][55] outline that energy intensity refers to the amount of energy required to produce a unit of output or provide a specific service. It is a measure of the efficiency with which energy is utilized. Lower energy intensity indicates higher energy efficiency. Based on empirical findings, Dong et al. [52] outline that declining energy intensity allows increasing energy efficiency among Chinese provinces and promotes the energy capabilities of the country. Shahiduzzaman and Alam [53] empirically justify that energy intensity and carbon dioxide emissions are closely related to each other, which consequently affects the Australian energy efficiency. Applying the Granger causality test, scholars [54] conclude that energy efficiency depends on the energy consumption structure, economic structure, and energy intensity. Based on the results, scholars suggest decreasing coal energy consumption and boosting the development of green energy. Hosan et al. [55] show that energy intensity directly impacts sustainable economic growth within the energy efficiency of a country. Su et al. [56] developed the composite energy efficiency index to develop policy recommendations to improve energy efficiency in OECD countries. Scholars justify the crucial role of final energy consumption in energy independence. Furthermore, scholars [56][57] highlight that energy efficiency has a significantly positive effect on final energy consumption in a country. Paramati et al. [58] confirm that environmental technologies have a significant positive impact on energy efficiency by reducing energy consumption. These findings indicate that environmental technologies contribute to reducing overall energy consumption and improving energy efficiency in OECD countries. Studies [59][60][61][62] confirm that decreasing CO2 emissions from fuel combustion improve the energy efficiency of a country. In addition, studies [63][64][65][66][67] show that renewable energy has the most significant impact on energy efficiency among all other dimensions. Thus, extending renewable energy allows for boosting the rapid growth of a country’s energy efficiency [68][69].

3. Digital Business and Energy Efficiency

The analysis of the theoretical background on energy efficiency shows that digital business can have both linear and nonlinear effects on energy efficiency, depending on how it is implemented and utilized. Scholars [70][71][72] outline that digital technologies and solutions are used to optimize energy consumption and improve energy efficiency. Digital systems and smart meters enable real-time monitoring of energy consumption, allowing businesses to identify inefficiencies and implement corrective measures promptly. By analyzing large volumes of data generated by digital systems, businesses gain insights into energy usage patterns, identify areas of potential energy waste, and proactively schedule maintenance to prevent energy losses [73][74]. Digitalization facilitates the implementation of energy-efficient processes, such as automated controls, smart grid technologies, and demand response systems. These technologies allow optimization of energy use and reduction of waste. Pålsson et al. [75] found that e-commerce eliminates the need for physical retail spaces, and the increased reliance on transportation could result in energy consumption and associated environmental impacts. However, studies [76] outline that efficient logistics practices, such as route optimization, consolidation of shipments, and the use of electric vehicles or alternative fuels, help minimize the energy intensity of e-commerce delivery operations.
At the same time, studies [77][78][79][80] justify the nonlinear effect of digitalization on energy efficiency. Morley et al. [81] confirm that digitalization leads to increased energy consumption if the efficiency gains are offset by increased usage or new applications. For instance, the proliferation of digital devices and data centers contributes to higher overall energy consumption. Babu et al. [82] highlight that the production, use, and disposal of digital devices generates electronic waste. Improper handling and disposal of e-waste negatively impacts the environment, including energy-intensive recycling processes and resource depletion. The growth of digital business often requires expanding data centers and related infrastructure. Gunasekaran et al. [83] explain that e-commerce businesses often operate large-scale warehouses to manage inventory and fulfill online orders. These facilities require energy for lighting, heating, cooling, and operating material handling equipment. Optimizing warehouse design, implementing energy-efficient technologies, and adopting sustainable practices such as energy management systems and renewable energy integration enhance energy efficiency in these operations. Chen et al. [84] confirm the nonlinear effect of e-commerce on energy efficiency. This means that the initial effects of e-commerce on energy efficiency could be negative, but over time, as technology and practices evolve, they lead to positive energy efficiency outcomes. The U-shaped impact is represented by a curve that initially dips downward (indicating a negative impact) and then rises upward (indicating a positive impact). The U-shaped impact of e-commerce on energy efficiency underscores the importance of proactive measures, technological advancements, and sustainable practices to mitigate initial negative impacts and capitalize on the long-term potential for energy efficiency gains. It highlights the need for continuous improvement and collaboration among e-commerce businesses, policymakers, and consumers to ensure a sustainable and energy-efficient e-commerce ecosystem.

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Aleksy Kwilinski
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Oleksii Lyulyov
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Tetyana Pimonenko
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Update Date: 26 Sep 2023
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