Electricity market structure and consequences for wind and solar uptake in the EU-27

This paper examines whether concentration in electricity generation affects the deployment of wind and solar capacity across the 27 European Union member states over 2000–2022. Market concentration is measured by the generation share of the largest electricity producer, and wind and solar deployment is measured as installed wind and solar capacity relative to total national electricity capacity. Using a country-level panel and dynamic estimation methods that account for persistence, unobserved heterogeneity, and reverse causality—including fixed-effects OLS and Arellano–Bond GMM estimators with lagged concentration as an internal instrument—the analysis finds no systematic relationship between market concentration and subsequent wind or solar deployment. The result is robust across alternative concentration and outcome measures, bias-corrected dynamic panel estimators, balanced samples, region-specific linear time trends and heterogeneity analyses across regions, transition stages, energy-system characteristics, and policy regimes. The findings suggest that within the EU institutional setting, market concentration per se is not a first-order constraint on renewable uptake; instead, deployment is primarily driven by policy settings and the path dependence inherent in installed capacity.