Tetiana Vasylieva

TU Bergakademie Freiberg, Germany; 

Sumy State University, Ukraine

E-mail: tetiana.vasylieva@extern.tu-freiberg.de 

ORCID 0000-0003-0635-7978

Electricity price shocks, renewable energy penetration, and macroeconomic stability in European countries: Evidence from the 2022 energy crisis

Judit Oláh

Széchenyi István University, 

Győr, Hungary

E-mail: olah.judit@nje.hu

ORCID 0000-0003-2247-1711

Samer Khouri

Technical University of Kosice, Slovak Republic

E-mail: samer.khouri@tuke.sk 

ORCID 0000-0001-7243-5124

Andreas Horsch

TU Bergakademie Freiberg, Germany

E-mail: andreas.horsch@bwl.tu-freiberg.de 

ORCID 0000-0003-4157-2454

Abstract. The 2022 European energy crisis exposed the macroeconomic vulnerability of EU economies to electricity price shocks and raised urgent questions about the stabilising role of renewable energy penetration. This study examines in how far changes in electricity price components affect macroeconomic stability in Europe and whether renewable energy penetration has buffered these effects during the crisis period. Using a balanced panel of 29 European countries over 2019–2024, the analysis estimates the impact of log changes in electricity prices on a composite Macroeconomic Stability Index (MSI) using two-way fixed-effects models with crisis-year heterogeneous slopes, interaction terms, and two-way clustered standard errors. The results show that increases in non-household electricity prices are associated with statistically significant declines in macroeconomic stability, particularly in 2023 (β = −0.084, p < 0.01) and 2024 (β = −0.333, p < 0.05). A 10% rise in business electricity prices reduced the MSI by approximately 0.009–0.010 points in 2023 (around 4% of one standard deviation) and by about 0.029 points in 2024 (around 13% of one standard deviation). In 2022, the adverse effect was significant in low-renewables countries (ME = −0.056) but statistically insignificant in high-renewables countries, indicating short-run buffering. Joint tests confirm that crisis-period slope shifts (χ² = 30.576, p < 0.001) and renewable moderation effects (χ² = 8.603, p = 0.035) are statistically significant.

Received: March, 2025

1st Revision: December, 2025

Accepted: April, 2026

DOI: 10.14254/2071-789X.2026/19-1/12

JEL Classification: E31, E62, Q41, Q48

Keywords: electricity price shocks, renewable energy penetration, macroeconomic stability, energy crisis 2022, two-way fixed effects, crisis heterogeneity, European economies