Sustainable Solutions for a Sustainable Future in the Natural Gas and Electricity Markets

Dear Colleagues,

Since 2020, inflation has soared in most countries across the world, with immense impacts on their economic evolution. Some of those countries are expected to witness an economic recession in 2023. There are several causes underlying this boost in and evolution of inflation, among which the covid pandemic and the Ukrainian war are especially significant. Although the covid pandemic is now an event of the past, it was responsible for one of the most remarkable breaks in the supply chain. In this context, the energy supply chain was not immune from the pandemic's effects, which initially altered and drastically reduced the demand for energy. However, the abatement of the pandemic entailed a rapid economic recovery that sharply increased the energy demand. This abrupt change in the energy demand led to a significant increase in energy prices. Natural gas prices, which peaked at the end of 2021, especially in the European and Asian markets, are an obvious example. Unfortunately, by the time it appeared that energy prices may be recovering, the Ukrainian war reversed the situation, hampering this recovery of affordable natural gas. According to IEA data, European and Asian countries have experienced the greatest impacts of the increased natural gas prices. This increase has had a compounded effect on the economies of these countries, impacting sectors that rely on high-temperature industrial processes in which natural gas plays a key role. In addition, since combined cycle power plants, which use natural gas for electricity production, play a role in the final clearing of energy prices in the electricity market, natural gas is also currently lagging behind the growth of energy prices in the electricity market. In light of this situation, this Topic aims to adopt the broadest possible scope so as to develop our understanding of the root of this problem and its inherent causes. As a main objective, this Topic will focus on the functioning of the natural gas trading and electricity markets. Specifically, we invite authors to submit papers that aim to explain and clarify the following developments:

• The current situation regarding the reserves, locations and different methods of the extraction and production of natural gas. Who is involved in the supply, transportation and subsequent sale of natural gas worldwide? What are the economic structures supporting these activities? Who are the leading actors? How are trade flows and the related changes in prices are determined? What are the factors that have shaped the current situation of the natural gas trade?
• The impact of the Ukrainian war on natural gas trading, the new routes of supply and the strategies for diversification.
• The functioning of the world’s leading electricity markets the ways in which their operation and market rules are responsible for the increase in electricity prices as natural gas prices increase.

The measures that have been implemented worldwide in the electricity markets so as to contain the increase in electricity market prices and their consequences. Another key objective of this Topic is to identify and provide solutions to the problem outlines above, focusing on topics including but not limited to:

• New sustainable primary energy sources that may be capable of replacing natural gas in some of the current processes, thus economically competing with it.
• New inversions and infrastructures that may help to contain changes in natural gas prices in the future.
• New and integrated strategies regarding the purchase of natural gas from the perspectives European and Asian countries.
• The required modifications of the current rules of the electricity market that may aid in efforts to prevent and mitigate the impact of natural gas prices on electricity prices.
• New sustainable energy asset solutions for the electricity sector that can provide the same services as the combined cycled power plants at lower marginal costs.

Dr. Helena Martin
Dr. Jordi de la Hoz
Dr. Pere Palacín
Topic Editors