What were the striking figures on the electricity markets this month?
June revealed a completely different side of the summer market than April and May. While spring was dominated by negative prices and frequent oversupply situations, June saw prices surge upwards.
Despite strong solar generation across Europe, average day-ahead power prices remained remarkably high: around 107 €/MWh in Germany and up to 133 €/MWh in Italy. With a record-breaking day-ahead price in Germany on June 24th (8:45-9pm) of 747€/MWh! Intraday markets proved even more dynamic, with the 95th percentile soaring to €1,595/MWh in Sweden (SE3)!
Negative prices, which had become almost routine in previous months, largely disappeared during weekdays and were mostly confined to isolated periods on Sundays. What stood out even more were the sharper price spikes during evening hours.
What are the possible reasons for this market behavior?
The main driver was the first major European heatwave of the year. Higher temperatures increased electricity consumption through air conditioning and cooling systems, while at the same time reducing the availability of conventional generation. Many thermal and nuclear power plants depend on sufficient cooling water and efficient heat dissipation. Particularly in France, concerns around cooling water availability began impacting market expectations much earlier than many anticipated.
At the same time, renewable generation continued to inject large volumes of solar power into the system during midday hours, creating increasingly steep ramps between low-priced midday periods and expensive evening peaks. The market therefore displayed volatility on both sides of the curve: abundant solar production during the day and scarcity during the evening.
The result was a market environment that once again highlighted a familiar reality: Europe still lacks sufficient flexibility to smooth power price fluctuations effectively. Batteries, flexible industrial loads and other responsive assets remain critical for balancing the system and capturing value from these increasingly dynamic market conditions.
What do you expect for the next month?
With summer only just beginning, we expect weather-driven volatility to remain elevated or even increase further.
Strong solar generation will continue to create downward pressure around midday, while warm evenings and constrained conventional generation may sustain significant upward price spikes. This should further widen intraday spreads and increase the value of flexibility.
Interestingly, current market behaviour also reinforces the business case for co-located battery storage. Storing solar power is no longer only about avoiding low-value midday hours. Increasingly, the real value comes from monetising extreme price spikes during evening peaks through continuous intraday trading.
And while everyone's attention is currently focused on summer, the coming winter may become equally interesting. Gas storage levels are currently tracking near the lower end of historical ranges, suggesting that volatility could remain a defining feature of power markets well beyond the summer season.
One thing remains certain: the energy system still needs significantly more flexibility. Germany is a long way from smoothing its power price curve and that creates opportunities for those who can react.
