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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

In: Proceedings of the 2025 10th International Conference on Financial Innovation and Economic Development (ICFIED 2025)

Author

Listed:
  • Mingze Qin

    (University College London)

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.

Suggested Citation

  • Mingze Qin, 2025. "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," Advances in Economics, Business and Management Research, in: Maizaitulaidawati Md Husin & Tomoki Fujii & Xiaodong Lai & Azlina Binti Md Yassin (ed.), Proceedings of the 2025 10th International Conference on Financial Innovation and Economic Development (ICFIED 2025), pages 431-444, Springer.
    • Handle: RePEc:spr:advbcp:978-94-6463-702-1_46
    DOI: 10.2991/978-94-6463-702-1_46
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