Since early 2021, Russia has systematically reduced supply of natural gas to Europe before halting most flows in mid-2022. This has caused gas prices to increase more than ten-fold, driving up electricity prices to unprecedented high levels and threatening low-income citizens and energy-intensive firms. Unsurprisingly, this has triggered intense public policy responses across the EU, ranging from tax holidays to cash support and interventions on electricity markets. While prices have fallen 80% since their peak in August 2022, the crisis continues to shape policy: the EU has announced a reform of electricity markets this year. The Centre for Sustainability responded to the crisis with public events starting in January 2022, numerous explainer texts and videos, policy advice in front of and behind the scenes, including as a member of the Gas Commission, and through media comments and research papers.

Publications and resources

In their working paper "Gas demand in times of crisis: Energy savings by consumer group in Germany," Centre for Sustainability researchers empirically estimate how consumers' demand for gas changes in response to price increases. Updated as of December 2022.

Just a few days after Russia’s invasion of Ukraine on 24. February, Lion Hirth and Centre for Sustainability researchers initiated an open letter on how to respond to the upcoming energy crises that was signed by more than 185 members of the German energy expert community.

Lecture

Electricity markets: Price formation explained

Watch Professor of Energy Policy Lion Hirth's lecture on how prices are set and why they constantly change.
Reference

The merit order model and marginal pricing in electricity markets

Professor Lion Hirth explains marginal pricing and the merit order model and clarifies common misconceptions about how prices are formed on electricity markets.
Lecture

How a gas price cap works

Professor Lion Hirth explains how a gas price cap works and how it would affect demand.

Lecture Series: Electricity Market Design

Lecture

Marginal pricing and the merit order

Professor Lion Hirth explains marginal pricing and the merit order principle. This is the first lecture in the Electricity Market Design series.
Lecture

Investment Dynamics and Scarcity Pricing

Professor Lion Hirth explains investment dynamics and scarcity pricing. This is the second lecture in the Electricity Market Design series.
Lecture

The Spot Market

Professor Lion Hirth explains the spot market. This is the third lecture in the Electricity Market Design series.
Lecture

Forward Hedging and Long-Term Contracts

Professor Lion Hirth explains forward hedging and long-term contracts. This is the fourth lecture in the Electricity Market Design series.

Media

News

Video: Lion Hirth in an Energy Policy Dialogue hosted by FDP Members of the German Parliament

The Professor of Energy Policy joined other experts to debate future energy policy measures for Germany, including how to move toward renewable energies while remaining globally competitive.
News

Coal phase-out auctions have cost Germany only about 700 million euros so far, say Silvana Tiedemann and co-author

The mechanism could be a rather inexpensive way to exit coal, but there might have been negative effects during the energy crisis, a new study by Centre for Sustainability and MCC researchers finds.
Event highlight

Video: Lion Hirth in conversation with Ranga Yogeshwar at Futurium

The Professor of Energy Policy spoke with science journalist and host, Ranga Yogeswhar, about energy markets and the current crisis.
In the media

Lion Hirth in FAZ: The balancing act between relieving consumers and saving energy

In an op-ed, the Professor of Energy policy explains the Gas Commission’s proposal for a price brake on gas.
Research

Consumers have reduced gas use significantly in response to energy crisis

Updated study from by Hertie School researchers Oliver Ruhnau, Clemens Stiewe, Jarusch Müßel and Lion Hirth shows that gas consumption has decreased even more than previously estimated.
Event highlight

Video: Ariadne Lunch Talk on the Gas Commission's results

Professor of Energy Policy Lion Hirth and Brigitte Knopf (MCC), both researchers from the Ariadne Project, discussed the Gas Commission's recent recommendations in a Lunch Talk event. Watch the video recording of the event here.
In the media

Lion Hirth in FAZ op-ed: A price cap on gas in Germany is not the way forward

In the Frankfurter Allgemeine Zeitung, the Professor of Energy Policy explains why the Gas Commission recommends against a gas price cap.
In the media

Interview with NZZ: Market mechanisms help prevent energy shortages in the crisis

Lion Hirth confronts the question of whether energy market liberalisation was a mistake, explaining that markets reduce the likelihood of shortages.
News

German government appoints Lion Hirth to expert commission on energy and gas crisis

The Professor of Energy Policy at the Centre for Sustainability joins experts across sectors to advise policymakers on tackling skyrocketing prices.
In the media

Podcast: Power market design

This podcast by Aurora Energy Research covers the current energy price crisis and implications for energy market design.
Study

Marginal pricing in electricity markets explained

Professor Lion Hirth explains marginal pricing and the merit order model and clarifies common misconceptions about how prices are formed on electricity markets.
In the media

Hirth to Deutschlandfunk: We must protect vulnerable households and save energy

In an interview with Deutschlandfunk, Lion Hirth explains the current energy crisis and key points for making it through. Above all: save energy and protect vulnerable consumers from the burden of high prices.
In the media

Heating smarter: How tenants, landlords, and politics can work together to save gas

Silvana Tiedemann and Lion Hirth explain how we can prepare for gas shortages and high prices - by working together to heat smarter.
In the media

'The Iberian electricity market intervention does not work for Europe'

This column for VoxEU examines the 'tope al gas,' a combined fuel subsidy and electricity tax, and explains its limitations.
In the media

Nuclear energy and coal? We need it all

In an interview with Capital, Lion Hirth discusses the energy crisis and tradeoffs that may be necessary to make it through this critical moment.
In the media

Should utility companies pay their customers to use less energy?

Centre for Sustainability researchers say an energy savings bonus is good for consumers, providers, and society alike.
In the media

Lion Hirth comments on EU energy crisis on Tagesthemen

The Professor of Energy Policy explains connections and consequences of surging gas and electricity prices.
In the media

Lion Hirth and colleagues critique the recent Greek market design proposal in op-ed

Proposed changes could lead to undesirable consequences, such as more power system costs and emissions, he writes in Euractiv.

Events

Student event

POSTPONED: Meet the Centre for Sustainability

Wednesday, 12.10.2022 | 3:00 pm - 4:30 pm (CEST)

As of 11. October 2022, this event has been postponed until further notice. We will communicate a new date as soon as possible!

On-site event

Public event

Hertie talks Ukraine: Energy policy response options for Germany and the EU

Thursday, 21.04.2022 | 6:30 pm - 8:00 pm (CEST)

Join a discussion with Marina Henke (Centre for International Security), Lion Hirth (Centre for Sustainability), Roderich Kiesewetter (CDU) and Ingrid Nestle (Bündnis 90/Die Grünen). This event is part of the Hertie talks Ukraine event series hosted in cooperation with the Centre for Sustainability.

Online event

Public event

#5 Fireside chat: Protecting vulnerable households in the energy crisis

Tuesday, 05.04.2022 | 12:00 pm - 1:00 pm (CEST)

In this Fireside chat, Lion Hirth from the Centre for Sustainability will welcome Matthias Kalkuhl from MCC & Universität Potsdam, main author of the empirical study on how to help households weather the energy crisis in Germany.

Online event

Public event

The Russian invasion of Ukraine: European Union energy policy response options

Friday, 11.03.2022 | 1:00 pm - 2:30 pm (CET)

Join this CIVICA Snowball Seminar addressing the implications of the Russian invasion of Ukraine for the European energy policy and hosted by the Hertie School Centre for Sustainability.

Online event

Public event

Explainer lecture: The European energy crisis

Wednesday, 02.03.2022 | 12:00 pm - 1:00 pm (CET)

In this explainer lecture, Lion Hirth from the Hertie School Centre for Sustainability will talk you through the workings of European gas and power markets, point to challenges and suggests a few remedies.

Online event

Public event

#2 Fireside chat: The European energy crisis. Implications for gas and electricity market design

Thursday, 03.02.2022 | 2:00 pm - 3:00 pm (CET)

The European energy crisis continues to unsettle companies, citizens and policy makers. To elaborate on those challenges, the Centre for Sustainability hosts a fireside chat with Prof. Lion Hirth and Hanns Koenig from Aurora Energy Research.

Online event

Public event

#1 Fireside chat: The European energy crisis. Taking stock and looking ahead

Thursday, 20.01.2022 | 2:00 pm - 3:00 pm (CET)

European energy markets are in turmoil. To elaborate on those challenges, the Centre for Sustainability hosts a fireside chat with Prof. Lion Hirth and Simon Müller, Director Germany of Agora Energiewende.

Online event