Implications of electricity and gas price coupling in US New England region

Abstract

The tight coupling between electricity and gas has put the US New England region at constant risk of electricity price spikes due to a shortage of gas supplies, especially in the wake of limited natural gas supply in 2022. Here, we investigate the electricity-gas price couplings in the six states in New England from 2006 to 2022. We found that the price coupling in New England has been high and consistent in the past five years across all states, despite varying levels of gas-fired power generation. Additionally, we anticipate it will remain high even with increasing renewables by 2030. Furthermore, the price coupling exhibits an asymmetrical influence with electricity prices closely tracking gas prices, while gas prices are weakly affected by electricity price variations. Our findings also suggest that promoting electricity-gas cooperations could potentially mitigate the asymmetrical influence and electricity price spikes in New England.