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Liquefied Natural Gas Prices and Their Relationship with a Country’s Energy Mix: A Case Study for Greece

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  • Christos Bentsos

    (Department of Maritime Studies, University of Piraeus, 18534 Piraeus, Greece)

  • Demetris Koursaros

    (Department of Commerce, Finance and Shipping, Cyprus University of Technology, Limassol 3036, Cyprus)

  • Kyriaki G. Louka

    (Economic Analysis and Research Department, Central Bank of Cyprus, Nicosia 2002, Cyprus)

  • Konstantinos D. Melas

    (Department of Economics, University of Western Macedonia, 50100 Kozani, Greece
    Faculty of Business and Economics, Metropolitan College, 54624 Thessaloniki, Greece
    Department of Supply Chain Management, International Hellenic University, 57001 Thessaloniki, Greece)

  • Nektarios A. Michail

    (Department of Commerce, Finance and Shipping, Cyprus University of Technology, Limassol 3036, Cyprus)

Abstract

Using daily data, we investigate the relationship between European LNG prices, carbon prices (CO 2 ), electricity wholesale prices and changes in the electricity sector’s energy mix in Greece, using a vector error correction model (VECM). The results indicate that an increase in the daily average price of natural gas has the expected impact on Greece’s wholesale electricity price. As expected, gas and other fossil fuels act as substitute goods, while higher imports of electricity lower prices and have a negative impact on fossil fuel shares. Interestingly, carbon prices do not appear to have any significant impact on any variables, while the higher production of electricity from renewable sources pushes wholesale electricity prices down.

Suggested Citation

  • Christos Bentsos & Demetris Koursaros & Kyriaki G. Louka & Konstantinos D. Melas & Nektarios A. Michail, 2023. "Liquefied Natural Gas Prices and Their Relationship with a Country’s Energy Mix: A Case Study for Greece," Energies, MDPI, vol. 16(22), pages 1-16, November.
    • Handle: RePEc:gam:jeners:v:16:y:2023:i:22:p:7554-:d:1279261
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    References listed on IDEAS

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