Abstract:
The abrupt shortage of natural gas imports during the 2022/2023 energy crisis following Russia's war against Ukraine forced European countries to rapidly cut consumption. In response, governments and energy providers introduced voluntary gas-saving programs offering financial incentives to residential customers. We study one such program - a critical peak rebate (CPR) launched by one of Germany's largest energy providers - that offered a six-month per-unit bonus for demand reductions at a time when wholesale gas prices spiked but regulated retail prices remained fixed, muting the price signal households actually faced. Combining household meter readings with survey data, we use a difference-in-differences design to "stress test" a CPR scheme. We show that the program-induced average gas savings amount to 13.2 to 17 percent. Participation was more likely among higher consumption, higher income and pro-socially motivated households, who also achieved larger absolute savings. This reveals a trade-off between program effectiveness and distributional considerations in the design of demand flexibility programs.
