Essays in empirical energy economics: Real-time electricity pricing, energy saving rewards, and auctions in the energy transition

The transition to a sustainable energy system requires a balance between climate protection, economic efficiency, and energy security. This dissertation contributes to understanding how to achieve these policy goals by evaluating the effect of real-time pricing on demand-side flexibility, financial incentives for energy savings, and auction-based steering of the national capacity mix. The two articles in the first part examine the challenges of estimating the response of electricity demand to real-time pricing. Despite theoretical expectations that dynamic pricing allows for flexible electricity consumption, empirical analyses show that consumers respond little to short-term fluctuations. However, they may systematically adjust consumption, providing a form of demand flexibility that is not captured by some econometric models. Moreover, time dynamics can bias results if not properly addressed. This work therefore advances our understanding of how to isolate different types of responses and how to interpret empirical findings. The article in the second part examines financial incentives for energy savings, focusing on gas saving rewards implemented during the European energy crisis of 2022/23. Analyzing micro-level consumption data, this research employs a matched control group design and the presently developed Double/Debiased Machine Learning estimator to show that direct financial incentives significantly reduce gas consumption. The two articles in the third part evaluate auctions to manage the national capacity mix. An evaluation of Germany’s coal phase-out auctions shows that the mechanism was designed to balance competing policy objectives, resulting in relatively low compensation costs but increasing the carbon intensity of the remaining coal fleet. The study of renewable energy auctions estimates bidders’ true costs and mark-ups, revealing significant heterogeneity in bidding strategies based on firm size and market experience. Overall, this dissertation provides empirical evidence for designing effective policies to advance the energy transition, drawing on econometric and causal methods. The findings underscore the need for tailored incentive structures and market mechanisms that are consistent with policy objectives, consumer behavior, and market dynamics.