Energy Markets Under Stress: Some Reflections on Lessons From the 2021-2023 Energy Price Crisis in Europe

This paper examines the 2021-2023 energy crisis in Europe exacerbated by the energy consequences of the full-scale Russia-Ukraine war which began in February 2022. We show that this was an historically unprecedented price shock to both gas and electricity prices. We then draw on lessons from UK energy policy in World War Two to inform our analysis of European energy policy during this crisis. In light of this, we highlight four good and three bad policy responses to observed across Europe. The EU has responsibility for the European single market in electricity and gas (which also formally includes Norway and effectively includes the UK). We examine its attempts to co-ordinate EU-27 responses to the crisis. We conclude with longer-run lessons for energy and climate policy arising from this gas and electricity price shock.