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The effect of the 2022 energy crisis on electricity markets ashore the North Sea

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  • Sæther, Bjarne
  • Neumann, Anne

Abstract

The European internal energy market has undergone institutional redesign during the last 30 years. It has the objective to deliver secure, affordable and increasingly decarbonized energy supply. Europe experienced its first inherent energy crisis after the global oil price crisis half a decade ago. With skyrocketing energy prices during 2022, electricity generation in Europe was under extreme stress. In this paper we analyse flows and prices of electricity in six distinctive (with respect to generation portfolios) European countries from 2018 to 2022 and investigate if market signals (prices) contributed to security of supply. For a long time, sceptics have argued that liberalized markets would not be able to provide security of supply, and this has not been challenged by real world events thus far. Our empirical results suggest that electricity did indeed move along cross-border transmission lines as the theory suggests, and that cross-border transmission lines were utilized as during normal periods. This is relevant for the current debate on restructuring energy market design and protecting consumers from volatile prices.

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  • Sæther, Bjarne & Neumann, Anne, 2024. "The effect of the 2022 energy crisis on electricity markets ashore the North Sea," Energy Economics, Elsevier, vol. 131(C).
    • Handle: RePEc:eee:eneeco:v:131:y:2024:i:c:s0140988324000884
    DOI: 10.1016/j.eneco.2024.107380
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    References listed on IDEAS

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    Cited by:

    1. Zhao, Wanli & Zhai, Xiangyang & Ji, Qiang & Liu, Zhenhua, 2024. "Measuring crisis from climate risk spillovers in European electricity markets," Energy Economics, Elsevier, vol. 134(C).
    2. Rangarajan, Arvind & Svec, Jiri & Foley, Sean & Trück, Stefan, 2025. "Revisiting the crisis: An empirical analysis of the NEM suspension," Energy Economics, Elsevier, vol. 141(C).

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    More about this item

    Keywords

    Electricity prices; Markets; Security of supply; European integration;
    All these keywords.

    JEL classification:

    • L94 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Electric Utilities
    • C5 - Mathematical and Quantitative Methods - - Econometric Modeling
    • G1 - Financial Economics - - General Financial Markets

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