Resumen:
Amid the global energy crisis, we examine the impact of electricity market regulations in the European Union (EU). Pursuing an integrated EU electricity market inadvertently heightened the interdependence between gas and electricity prices. The EU energy crisis, triggered by the gas supply shock, amplified power prices and their volatility. These volatility spikes led to substantial margin increases on power futures contracts crucial for mitigating electricity price risks. The increase in margins placed a substantial financial burden on EU power utilities. We document an almost eight-fold surge in required collateral for long positions in front-month EU power futures contracts during the one-year duration of the crisis. Throughout the crisis, EU utilities experienced lower sales and profitability compared to their US counterparts, and a portfolio of EU power utilities significantly underperformed a counterfactual portfolio of US power utilities.
Resumen divulgativo:
La crisis de energía de la UE intensificó la interdependencia entre gas y electricidad. Los precios se elevaron tras el shock en el suministro de gas, afectando a las empresas. El colateral aumentó considerablemente. Las empresas de la UE tuvieron ventas y rentabilidad menores que las de EE. UU.
Palabras Clave: Electricity markets regulations; Zonal vs nodal pricing; Margins; Synthetic controls; Financial performance
Índice de impacto JCR y cuartil WoS: 5,400 - Q1 (2023)
Referencia DOI:
https://doi.org/10.1016/j.intfin.2024.102008
Publicado en papel: Junio 2024.
Publicado on-line: Mayo 2024.
Cita:
I. Segarra, C. Atanasova, I. Figuerola-Ferretti Garrigues, Electricity markets regulations: the financial impact of the global energy crisis. Journal of International Financial Markets, Institutions and Money. Vol. 93, pp. 102008-1 - 102008-15, Junio 2024. [Online: Mayo 2024]
