Analyzing optimization of energy use becomes only possible when their interactions with the indicators of social development are properly estimated. The study employed the panel VAR and impulse response functions to investigate this causal interaction by analyzing panel data from 27 EU countries. The results reveal that a 1% increase in renewable energy consumption contributes to raising life expectancy, fertility and education by 2.20%, 1.27% and 2.11% respectively. However, a 1% surge in fossil fuel utilization contributes to lower life expectancy and fertility by 0.66% and 2.76% and gives rise to education by 0.33%. Reciprocally, fertility, education and research and development contribute to renewable energy utilization by 1.75%, 2.82% and 3.34% respectively whereas research and development contribute to decreasing fossil fuel combustion by 3.57%. Lastly, urbanization and internet subscriptions were found to have no statistically significant interaction with energy use, inferring that these social factors do not contribute to energy use. Therefore, this study urges policymakers to invest in the education sector and research and development to achieve sustainable socio-economic development by simultaneously optimizing energy consumption and increasing the overall share of renewable energy by diversifying its production from green energy sources (solar, wind and hydro) in the EU countries.