An increase in the share of renewable energy sources (RES) in the energy mix has a significant impact on GDP growth in Central and Eastern European (CEE) economies, according to a 2025 report by the Warsaw School of Economics (SGH) and the Economic Forum. However, the speed of this transition is critical: changes should not be too abrupt. Energy mixes across the region vary, but fossil fuels remain dominant in all countries. Poland is the most dependent, which means its energy transition plan must be aligned not only with EU climate policy but also with the specific needs of the Polish economy.
“In our report we identified a positive impact of the energy transition and the growing role of renewables on economic growth. However, the pace of transition does not show such positive effects, at least in the short term. This means that economies must shift toward renewable energy, but in a reasonable and non-drastic way, as this is a multi-dimensional, long-term process,” said Dr. Tomasz P. Wiśniewski, head of the European Union Department at SGH and co-author of the report.
Fossil Fuels Still Dominate CEE Energy Mixes
The report shows that in all 11 Central and Eastern European economies, fossil fuels — coal, oil, and natural gas — dominate energy mixes. In 2023, Poland had the highest dependency, with fossil fuels making up 88% of its mix. Estonia (nearly 85%) and Lithuania (over 82%) followed. Slovenia had the lowest share of fossil fuels at 56%.
Six countries (Bulgaria, Czechia, Romania, Slovakia, Slovenia, and Hungary) also rely on nuclear power, which accounts for 8–25% of their energy mix.
“Poland has the most coal-heavy energy mix in all of Europe, and the entire CEE region is dominated by fossil fuels. This means the transition must proceed at an appropriate pace. Our findings show that in the short term, the speed of transition does not generate the same benefits as the very fact of increasing renewables’ share — those gains appear more clearly in the long run,” Wiśniewski explained.
Two-Way Link Between Renewables and Economic Growth
The report highlights a bidirectional relationship between RES and GDP: higher economic development encourages greater investment in renewables, which in turn fuels further growth.
In Poland, the share of RES rose from 0.8% in 2001 to 12.2% in 2023, an increase of 11.4 percentage points — close to the CEE average of 11.1 percentage points. The largest increases were seen in Lithuania (+16.4 pp), Estonia (+15.4 pp), and Bulgaria (+12.9 pp). Estonia also recorded the highest growth dynamics, with a compound annual growth rate (CAGR) of 23%. Poland’s CAGR was 13%, among the top four in the region, behind only Estonia, Hungary, and Lithuania.
Transition Requires More Than Renewables
“The energy transition is often understood as the growing role of RES, but that’s only part of the truth. It also involves major processes like adapting the power grid and changing how societies use energy. Development of renewables must be aligned with the resilience of the power system and with the starting point of each economy’s energy mix,” Wiśniewski stressed.
For this reason, he argues, every country must find its own transition path.
“This is about preparing the economy and its sectors properly so that the transition and the shift to renewables are not carried out in a shock-like manner. The recommendation for Poland is that this path should reflect the realities of our economy and energy structure, with a long-term vision in mind. The energy transition is a long-haul process that cannot be implemented over just a few years,” he added.
Compatibility with EU Climate Policy
For CEE states, the transition must also remain consistent with EU climate policy frameworks.
“The golden mean is to design Poland’s transition path in a way that is compatible with EU frameworks but also tailored to the needs of the Polish economy and society,” the SGH expert concluded.
