Comparative Analysis of Resilience Performance and Mechanisms in Wholesale Electricity Markets: U.S. and E.U. Response to Natural Gas Price Shocks During the 2022 Global Energy Crisis

Mingze Qin ()
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Mingze Qin: University College London

A chapter in Proceedings of the 2025 10th International Conference on Financial Innovation and Economic Development (ICFIED 2025), 2025, pp 431-444 from Springer

Abstract: Abstract The 2022 global energy crisis, triggered by soaring natural gas prices, severely impacted wholesale electricity markets, particularly in the E.U., where electricity prices surged drastically. This study compares the resilience of U.S. and E.U. wholesale electricity markets in responding to natural gas price shocks. A conditional quantile regression model was developed to analyze the performance of six U.S. Independent System Operators (ISOs) and the wholesale markets of 27 E.U. countries. Results show that U.S. markets, especially those employing capacity mechanisms, exhibited stronger resilience. Within the E.U., countries like Spain, Portugal, and Poland also demonstrated better resilience. Capacity mechanisms such as capacity payments or auctions played a crucial role in enhancing market resilience, while markets lacking these mechanisms were more vulnerable. This study provides key insights for policymakers aiming to improve the resilience of electricity markets in the face of future energy crises.

Keywords: Wholesale electricity markets; Day-ahead markets; Resilience mechanism; Conditional quantile regression analysis; U.S.; E.U (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:spr:advbcp:978-94-6463-702-1_46

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DOI: 10.2991/978-94-6463-702-1_46

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