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European Energy Markets
8JUN

German clean spark spread holds negative

2 min read
12:01UTC

Germany's clean spark spread held at roughly EUR -8 to -9/MWh on Monday, with EUA carbon at EUR 76.08/tCO2 stacking onto fuel to push CCGT marginal cost above EUR 132. The plants Berlin wants built cannot cover their running cost.

EconomicAssessed
Key takeaway

Carbon over gas keeps German CCGTs off-merit even as TTF re-rates, the failure the StromVKG subsidises around.

Germany's clean spark spread held at roughly EUR -8 to -9/MWh on Monday 8 June, with EUA carbon at EUR 76.08/tCO2 stacking onto fuel to push CCGT marginal cost above EUR 132/MWh 1. The EUA is the EU Emissions Allowance, the carbon permit under the EU Emissions Trading System priced per tonne of CO2. A German CCGT burning gas at the day-ahead clear loses roughly EUR 8 on every MWh it generates. EUA eased from the EUR 78.22 it reached on 4 June , but nowhere near enough to flip the spread positive.

Carbon cost stacked on top of higher fuel keeps marginal cost above where the day-ahead clears, so the plants stay off-merit even as gas re-rates rather than because it falls. German CCGTs were already off-merit at EUR 129/MWh against a EUR 106 clear on 22 May ; the condition has held through TTF's move past EUR 50, the lead development in this briefing .

TTF re-rating deepens rather than relieves the problem, because the higher fuel cost compounds the carbon load. This is the economic failure the cabinet-approved StromVKG, detailed earlier in this briefing, is built to subsidise around: plants that should provide dispatchable backup cannot earn their running cost, so Berlin proposes a capacity premium instead of a price signal the carbon-over-gas maths will not deliver. With the first auction fifteen months out, the negative spread is the operative reality now.

Deep Analysis

In plain English

The clean spark spread is a number that tells you whether a gas power station in Germany is making money or losing it. It takes the price a station gets for selling electricity, subtracts what it costs to buy the gas to generate it, and also subtracts the price of the pollution permit required under EU carbon rules. On 8 June in Germany, the spread sat at roughly minus EUR 8 to 9 per megawatt-hour. That means for every unit of electricity a gas station produced and sold, it lost between EUR 8 and EUR 9 after paying for its gas and carbon permit. At those economics, any rational owner shuts the plant down rather than run it. This is exactly the problem the new German subsidy law passed on Monday is designed to fix: it promises to pay gas stations a fixed annual fee just for existing and being ready to switch on, so that Germany has backup power capacity available even when running the plants makes no commercial sense.

Deep Analysis
Root Causes

The EUR -8 to -9/MWh German clean spark spread on 8 June has three stacked cost drivers.

First, the EUA carbon contribution: at EUR 76.08/tCO2 and a CCGT emission factor of roughly 0.52 tCO2/MWh, carbon alone adds EUR 39.56/MWh to CCGT marginal cost, exceeding the gas input cost at typical 52% thermal efficiency.

Second, TTF fuel cost: at EUR 50.83/MWh delivered TTF and a CCGT thermal efficiency of roughly 52%, the gas input cost per MWh of power produced is approximately EUR 97.75/MWh. Combined with carbon, the all-in CCGT short-run marginal cost exceeds EUR 137/MWh against EUR 124.25 day-ahead clearing.

Third, the policy context: the storage levy lapsed on 1 January 2026 without replacement. German CCGTs can no longer offset dispatch losses against a regulated storage injection incentive. The combination of high carbon, high gas, and no policy offset explains why the negative spread has persisted for three consecutive weeks without a commercial correction.

What could happen next?
  • Consequence

    German CCGTs operating off-merit reduces Germany's dispatchable generation reserve margin during periods of low wind and solar, raising the probability of grid stress events in the 2026-27 winter season before any StromVKG capacity comes online.

  • Risk

    If EUA recovers toward the Reuters analyst consensus of EUR 80.61/tonne, the clean spark spread deepens toward EUR -14 to -15/MWh, removing any commercial case for German CCGT dispatch and increasing dependence on mandatory storage injection and cross-border imports to balance the grid.

First Reported In

Update #16 · TTF closes above EUR 50 on Iran risk re-rate

Trading Economics· 8 Jun 2026
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