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Electricity market resilience in the face of Hurricane Harvey: A network-oriented approach

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  • Zhao, Yue
  • Brooks, Adria E.
  • Du, Xiaodong

Abstract

In our study, we analyze the nodal price responses to Hurricane Harvey in the Texas wholesale electricity market, treating the event as a natural experiment. Using a network matrix and synthetic control method, we find that the most significant price impacts occurred in southern Texas, particularly in nodes that were connected to fewer other nodes and were electrically closer to the most damaged parts of the network. This finding highlights the importance of adopting an electric network-oriented perspective when examining the impacts of external shocks on the wholesale electricity market. Furthermore, our study reveals that counties with inferior economic conditions and frequent exposure to hurricanes experienced more substantial economic losses due to electricity price spikes. Therefore, enhancing electric infrastructure and disaster preparedness in those regions is crucial for policy considerations.

Suggested Citation

  • Zhao, Yue & Brooks, Adria E. & Du, Xiaodong, 2024. "Electricity market resilience in the face of Hurricane Harvey: A network-oriented approach," Energy Economics, Elsevier, vol. 139(C).
    • Handle: RePEc:eee:eneeco:v:139:y:2024:i:c:s0140988324005875
    DOI: 10.1016/j.eneco.2024.107879
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    1. Bassière, Alicia & Benatia, David, 2025. "Moving forward blindly: Uncertainty, reliability, and the energy transition," Energy Economics, Elsevier, vol. 151(C).

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    Keywords

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    JEL classification:

    • C53 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Forecasting and Prediction Models; Simulation Methods
    • Q41 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Demand and Supply; Prices
    • Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes

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