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Quantifying Cybersecurity Impacts on Clean Energy Market Volatility: A Time-Frequency Approach

Author

Listed:
  • Catalin Gheorghe

    (Department of Engineering and Industrial Management, Transilvania University of Brasov, Eroilor Street 29, 500036 Brasov, Romania)

  • Oana Panazan

    (Department of Engineering and Industrial Management, Transilvania University of Brasov, Eroilor Street 29, 500036 Brasov, Romania)

Abstract

This study investigates the impact of cyber threats on the clean energy (CE) market, which is increasingly dependent on digital technologies and interconnected infrastructure. The sector’s growing digitalization makes it more susceptible to cyberattacks, leading to significant effects on market volatility and financial performance. Using time-varying parameter vector autoregression (TVP-VAR), wavelet coherence models, and rolling window analysis, this research examines the dynamic relationships between cyberattacks and the CE market over various timescales. The severity of cyberattacks is quantified using the OWASP risk rating methodology, providing a structured approach to assessing cyber risks. The findings reveal that high-severity cyberattacks targeting critical infrastructures generate pronounced short-term volatility, especially in concentrated indices such as TAN and ICLN. In contrast, diversified indices like PBW and RNRG demonstrate greater resilience, highlighting the protective role of portfolio diversification. Moreover, the impact of cyber threats is exacerbated during periods of macroeconomic instability, reinforcing the need for integrated risk management approaches. These results provide actionable insights for investors and policymakers, emphasizing the need for proactive risk management strategies to enhance market resilience and safeguard the CE sector from cybersecurity threats.

Suggested Citation

  • Catalin Gheorghe & Oana Panazan, 2025. "Quantifying Cybersecurity Impacts on Clean Energy Market Volatility: A Time-Frequency Approach," Mathematics, MDPI, vol. 13(8), pages 1-54, April.
    • Handle: RePEc:gam:jmathe:v:13:y:2025:i:8:p:1320-:d:1637102
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