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Smart Grids & Energy Markets

We research innovative design aspects of future energy systems as an interdisciplinary team and network. To this end, we draw our competencies and knowledge from the fields of business informatics, management and economics, as well as quantitative social science. We aim to support the process of the German "Energiewende" within the so-called ‘triangle’ of energy policy constraints, namely economics, sustainability, and security of supply - often augmenting the triangle with a fourth edge of societal acceptance.

We focus on mechanisms that foster efficient and sustainable agent behavior in an increasingly decentralized energy system by means of intelligent incentive design. Our main areas of expertise are demand side management, electric mobility, networks, and energy storage.

Head of Division

Johannes Gärttner Dr. Johannes Gärttner
+49 (721) 608 48378

David Dauer Dr. David Dauer
+49 (721) 9654 862
dauer∂fzi de

Research Assistants

Philipp Staudt
Philipp Staudt
+49 (721) 608 48381
philipp staudt∂kit edu

Florian Salah
Florian Salah
+49 (721) 608 48381
florian salah∂kit edu

Esther Marie Mengelkamp
Esther Marie Mengelkamp
+49 (721) 608 48377
esther mengelkamp∂kit edu

Yannick Femppel
Yannick Femppel
+49 (721) 608 48377



Julian Huber
+49 (721) 9654 817



The “Energiewende” encompasses the social and technological transition towards a more sustainable energy system. Decentralized energy generation - based on photovoltaics, wind power and biomass - and electric mobility are gaining importance. The successful decentralization of the energy system thus requires appropriate organizational, economic and technological solutions.

Through the design of algorithms and economic mechanisms, as well as the formulation of optimization approaches and the determination of their solutions, we meet the challenges of the Energiewende. Furthermore, we analyze the consequences of regulatory interventions in network industries in general and particularly in the energy sector. The central idea behind this is a system design along the energy economic trilemma of security of supply, efficiency and sustainability, which picks up the current technological and economic changes. Considerations about shifting the predominant market design towards regional energy markets take a central role in our research.

Our research results show the economic potentials associated with emergent information technology opportunities (e.g., components of the smart grid). Furthermore, from these results it is possible to derive requirements for the constructive design of energy markets, systems, and services, and outline the necessary regulatory framework. Hence, our work constitutes an active contribution to the realization of the energy turnaround.


Research Topics

  • Energy Economics in Smart Grids
    • Evaluation of the economic effects of reduced transaction costs
    • Analysis of investment incentives in generation and grid capacities
    • Usage of Smart Grid technologies for the realization of information-intensive economic mechanisms (e.g. local energy markets)
    • Implementation of Blockchain technology for efficient coordination on local energy markets, especially including renewable energy sources and energy storage technology
  • Demand Side Management / Demand Response (DSM/DR)
    • Coordination of the charging of electric vehicles under consideration of grid restrictions and the availability of renewable energy
    • Design of variable prices for the reduction of peak loads and the integration of renewable energy
    • Clustering different types of end consumers for utilization of flexible demand
    • Characterization of household appliances concerning their suitability for DSM and analysis of potential system cost reductions
    • Analysis of efficient incentives for households to participate in DSM-Programs through optimized tariffs and energy services
  • Market Design and Architecture
    • Implementation of market platforms for the decentralized coordination of actors with heterogeneous preferences (consumers, producers, prosumers) and for the coordination of decentralized, Blockchain-based Smart Grids
    • Intelligent software agents for the simulation and analysis of local energy markets
    • Modelling, Simulation, and Analysis of local energy markets and corresponding innovative transaction objects
    • Empirical Analysis of the user acceptance of innovative energy products
  • Energy Services and Energy Informatics
    • User feedback and electronic services to increase the individual energy efficiency (including non-monetary incentive systems)
    • User preferences elicitation and implementation of feedback mechanisms
    • Enhancement of energy efficiency by means of adequate information provisions
    • Implementation of a Blockchain-based billing system for trading local storage and generation capacity
    • Evaluation of decentralized local energy markets (e.g. on Blockchain-basis)

For additional information and publications please visit the pages of the particular employees.

Methodological Competencies:

  • Market design and architecture, mechanism design, prototyping of market platforms for decentral coordination of agents (consumers, producers, prosumers)
  • Simulation
  • Stochastic optimization
  • Empirical analyses (descriptive and inductive statistics)
  • Design science
  • Blockchain technology




Competence Areas

The Energy Transition or “Energiewende” defines the societal and technological transformation processes required for the design and deployment of the future energy system. Therein decentralized energy generation (mainly photovoltaic, wind energy, biomass) and electric-mobility play a key role. A successful decentralization of the energy system requires appropriate organizational, economic and technical solutions for which we develop and evaluate adequate processes and methods.


Smart Grid - the intelligent electricity grid entails the ICT based interconnection of power plants, grid assets and in particular the demand side. Thus it delivers the technical foundation for an economically efficient implementation of key aspects of the energy transition, such as the local coordination of supply and demand. The IISM has extensive experience in this particular research field e.g. from contributions in the eEnergy and ICT for e-mobility initiatives. Therein it contributed significantly to the design and assessment of local energy market concepts.


Flexibility – is currently an underrated good, though it increasingly attains a higher importance in the energy and particularly electricity system. Flexibility allows the integration of the demand side as an active part into electricity markets and thus constitutes a substantial building block to stabilize current and future electricity supply. The expertise of the IISM is to quantify the potential of demand side flexibility, as well as the analysis and economic assessment of its application in other sectors, such as in the interconnected and multimodal electric-mobility.