8JUN

German power climbs to EUR 156, spark flips

2 min read

12:01UTC

German day-ahead power cleared EUR 156/MWh on 16 July, up from EUR 126 two days earlier, as cooling demand under the heat dome dragged the clean spark spread from negative into positive.

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Key takeaway

A demand-driven spark spread turned Germany's CCGTs profitable, a margin a cooler week would knock out.

Germany day-ahead power cleared an average EUR 126/MWh on 14 July, EUR 132 on 15 July and EUR 156 on 16 July, climbing on cooling demand as the heat dome held ¹. Day-ahead is the price for next-day delivery; the clean spark spread is what a gas-fired CCGT earns after paying for its gas and its carbon. Run these clears through the standard 49.13% efficiency and 0.365 tCO2/MWh convention, against TTF near EUR 55 and EUA carbon near EUR 80, and the spread swings from roughly negative on 14 July to positive by 16 July.

German combined-cycle plants clear because the heat needs the megawatts, and the margin turning positive is a by-product of power outrunning its inputs rather than any softening in gas. That distinction is the whole trade: a spark spread that widens on power strength behaves differently from one that widens on cheap fuel, because it collapses the moment the heat breaks.

This eases rather than reverses the squeeze the desk logged on 9 July, when gas and power rose together and compressed the same spread . Then the pressure came from the fuel side; now it comes from demand. The CCGT stack is back in the money, but on a footing that a cooler week would knock straight out again.

Deep Analysis

In plain English

Gas-fired power stations in Germany make money on the gap between what they pay for gas and carbon permits and what they earn selling electricity. That gap, called the clean spark spread, had been slim or negative for weeks. This week electricity prices jumped because of the heat wave (people running air conditioning), while gas and carbon costs did not rise as much, so gas power plants suddenly became profitable to run again. It is less about gas getting cheaper and more about electricity getting more expensive faster than its ingredients did.

Deep Analysis

Root Causes

Germany's clean spark spread flips sign whenever day-ahead power climbs faster than its two input costs, gas (TTF) and carbon (EUA), move together. This window that happened because cooling demand pulled German day-ahead from EUR 126 to EUR 156/MWh across three sessions while TTF firmed only modestly and EUA actually eased back under EUR 81 (see the carbon event in this briefing), leaving the power side of the equation to do almost all the work.

The structural precondition is thin renewable output: when wind generation is low during a heat dome, as it has been through this window, German CCGT plant sets the marginal clearing price directly, so any demand spike shows up in the power price with little dilution from cheaper generation displacing it.

What could happen next?

Consequence
A positive clean spark spread gives German CCGT operators an incentive to run harder into the remaining heat window, which in turn supports gas demand even as storage injection slows elsewhere.

Sources:Trading Economics·energyprices.eu (ENTSO-E sourced)

Mentions:Germany →EUA →CCGT →TTF →

First Reported In

Update #27 · TTF hits EUR 55; the arb won't confirm it

Trading Economics· 16 Jul 2026

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Causes and effects

Caused by

Two shocks squeeze the spark, not FR-DE

Continues the 9 July gas-and-power squeeze on Germany's clean spark spread, which now turns positive rather than negative.

Occurred 9 Jul 2026

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This Event

German power climbs to EUR 156, spark flips

The spark margin turned positive because power outran its own fuel and carbon costs, not because gas got cheaper.

Led to

German gas plants priced out of merit

The positive clean spark spread recorded on 16 July inverted to negative by 20 July as gas and carbon costs outpaced power revenue.

Occurred 19 Jul 2026

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Spark stays negative, French edge erodes

The 16 July positive spark inverted again as gas and carbon outran day-ahead power.

Occurred 22 Jul 2026

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Different Perspectives

French industrial power consumers

France's day-ahead discount to Germany has nearly closed as TTF and EUA rise together on both sides of the border, eroding the arbitrage French industry relied on through the summer. A standing negative spark removes the German demand buffer that kept that spread wide.

TTF trading desks

Desks are reading the inversion as an injection-arbitrage trade: buy TTF at EUR 62.4/MWh now, accept the near-term loss on the spread, and sell into the winter strip once caverns are forced back into the market. The 0.8 GWh/day German print makes that trade increasingly asymmetric.

Oxford Institute for Energy Studies

Two straight sessions of negative clean spark spread confirm gas has stopped setting German power prices cleanly; CCGT dispatch now follows the spread's sign, not storage need. Caverns quitting the prompt bid on 21 July is that mechanism working exactly as the structural read predicts.

European Commission

State-aid approval for StromVKG has not been granted, a status Bundesnetzagentur's own scheme page confirms, and Brussels was not consulted before the auction opened. Every award from the 8 September deadline stays exposed to a formal proceeding or clawback once the Commission rules.

Bundesnetzagentur

Bundesnetzagentur opened the first 4.5 GW StromVKG capacity auction on 21 July, bids due 8 September, without waiting for EU state-aid clearance. Berlin is treating Germany's 24% share of EU storage as urgent enough to move first on capacity and negotiate the state-aid question with Brussels afterwards.

Marine insurers and AIS trackers covering Hormuz

AIS data shows severe curtailment on 20 July, 479 vessels anchored, 36 dark, 123 still broadcasting inside the strait, not the closure the IRGC claims. War-risk premiums move on the unresolved CENTCOM-IRGC contest itself, since underwriters price the dispute as much as the count.