A Cold Tuesday Morning in Berlin

The most important decisions about this morning were taken before lunch yesterday.

At around midday on Monday, weather forecasts for Tuesday were firm enough to act on: cold, largely still, thin winter light. Every large participant in the German market — utilities, industrial consumers, trading houses, aggregators — turned those forecasts into a view of what Tuesday would need and what Tuesday could supply. By midday they had submitted their bids into the day-ahead auction, which sets a price for each delivery period of the following day across most of Europe simultaneously.

The auction cleared. By Monday evening, the shape of Tuesday existed on paper: an expected demand curve, a set of prices, and — implicitly — an instruction to every generator in the market about whether it made economic sense to run in each hour. A gas plant outside Hamburg learned that it would be needed. A pumped-storage station in the Alps learned which hours to fill and which to empty. This is what the market actually is: not a place where energy is bought, but the mechanism through which a continent decides what to switch on.

On a windy January day, the German answer to that question is easy: wind. On a still one, it is more interesting.

Solar contributes almost nothing at six in the morning in January, and not very much at nine. Wind, on a calm anticyclonic morning, may be running at a small fraction of its installed capacity. What remains is the controllable fleet: gas, coal and biomass plants, hydropower and pumped storage, waste incineration and industrial cogeneration — plus imports across borders from neighbours whose own mix looks different this morning.

This is where being connected to a continent rather than sitting alone becomes worth something concrete. French nuclear output does not care whether the wind is blowing in Brandenburg. Norwegian and Alpine hydro reservoirs can be released precisely when they are most valuable. Danish and Dutch wind conditions are correlated with German ones but not identical. Across an interconnected system, a still morning in one place is very rarely a still morning everywhere, and the price differences that result are exactly what pull electricity toward the places that need it most.

Germany is typically a net importer during winter evening peaks, drawing on average around 4.7 gigawatts at five in the afternoon. The morning follows the same logic with a smaller amplitude.

At some point in the early morning, the weather does something slightly different from what was expected yesterday. It usually does. Cloud arrives an hour late. A wind farm in Schleswig-Holstein produces rather more than modelled. A large industrial consumer decides not to start a process.

None of this can be corrected in the day-ahead market, which closed yesterday. It is corrected in the intraday market, where participants trade continuously, right up to a few minutes before delivery, to bring their positions back into line with what is actually happening. This is unglamorous work and it never stops. It is also the part of the market that has grown most quickly as weather-dependent generation has expanded, for the obvious reason: the more your supply depends on the weather, the more often you need to adjust.

And behind the intraday market sits the last layer, the one that operates in seconds rather than minutes. The transmission system operators hold contracted reserves — generators and, increasingly, batteries and flexible industrial loads that have been paid to stand ready — and they call on them automatically to keep the grid frequency stable. You will never see this happen. It is the reason the lights do not flicker.

All of the above describes a system doing its job. It is worth looking at what happens when the margins get thin, because it tells you what the whole arrangement is actually for.

In November and December 2024, Germany experienced two periods that the language has a word for: Dunkelflaute — dark doldrums, in which wind and solar output collapse together for days at a time under a cold, still, overcast high-pressure system. On 5 to 7 November and again on 11 to 12 December, prices that had averaged around 79 euros per megawatt-hour across 2024 rose above 300 euros for extended stretches and peaked, on the day-ahead market, at 936 euros. In intraday trading on 12 December they briefly approached a thousand.

This attracted a great deal of attention, and a natural suspicion: were generators withholding capacity to drive the price up? The Bundesnetzagentur and the Bundeskartellamt, the German network regulator and competition authority, investigated together and published their findings on 21 October 2025. They found no indications of market manipulation, and continued to look more closely at individual matters. In the single most expensive hour of each event — five to six in the afternoon, in both cases — there were still roughly 4.5 and 3.4 gigawatts of unused market capacity, plus twelve to thirteen gigawatts of reserves and balancing energy held back. Security of supply, they concluded, was never at risk.

The price, in other words, was doing exactly what a price is supposed to do. It was not a symptom of a broken market. It was a very loud, very expensive signal that at that moment, in that place, electricity was genuinely scarce — and that whoever could produce it, store it, import it, or simply do without it for an hour would be rewarded for doing so. The regulators drew the obvious conclusion in their own language: what Germany needs is more controllable capacity and far more flexibility on both sides of the meter.

We hope this essay has done two things. First, that it has made the daily rhythm of the European power system visible — not the technology, but the choreography: the day before, the morning of, the seconds in between. Second, that it has shown what prices are for. When the wholesale price rises sharply on a dark, still winter evening, it is not evidence that something has gone wrong. It is the system telling everybody, simultaneously and honestly, that electricity is scarce right now — which is the only way a market of thousands of participants can coordinate a response within the hour.

If you found this useful, the other essays in the Discover Energy series look at different dimensions of the same system. How electricity reaches your light switch in the first place. Why prices sometimes fall below zero on sunny Sunday afternoons. How the map of European gas was redrawn after 2022. The invisible market in carbon and green certificates. We hope you read them.

For the deeper technical background on European market structure, see our European Energy Markets page. For the mechanics of trading itself, see Energy Trading Explained.