Interaction of electricity futures prices with economic and financial indicators: A case study of Türkiye

Purpose — This study examines the relationship between macroeconomic variables and monthly base-load electricity futures prices. In particular, it investigates how exchange rates, electricity consumption, inflation, Brent oil prices, and interest rates influence electricity futures contracts in financial markets.Methods — Using monthly data from January 2016 to July 2025, the study applies the Autoregressive Distributed Lag (ARDL) bounds testing approach to analyze short-run and long-run dynamics. This method is well suited to examining relationships among variables with different integration orders and allows simultaneous estimation of equilibrium and adjustment processes.Findings — The empirical results show that Brent oil prices, electricity consumption, and exchange rates positively affect electricity futures prices in the long run, whereas interest rates have a negative effect. Short-run estimates largely confirm these long-run relationships, indicating consistency across time horizons.Implication — These findings have implications for investors, energy market participants, and policymakers by highlighting the sensitivity of electricity futures prices to key macroeconomic indicators, thereby informing pricing, hedging, and energy policy decisions.Originality — This study contributes to the literature by providing comprehensive empirical evidence on the dynamic interactions between macroeconomic indicators and electricity futures prices in an emerging market context, with a focus on Türkiye.