Exchange electricity price (Börsenstrompreis) · Glossary

The exchange electricity price is the price at which electricity is traded on an organised power exchange for a precisely defined delivery period. What is traded is not "electricity" in general but a standardised product: electrical energy delivered in a specific quarter-hour, hour, daily block, or as a monthly, quarterly or annual contract. In German usage, the term usually means the short-term wholesale price on the spot market, above all the result of the auction on the day-ahead market for the Germany/Luxembourg bidding zone, as published by EPEX Spot, for example. Intraday or forward market prices may also be meant. This should then be stated explicitly.

The usual unit is euros per megawatt hour (€/MWh). One megawatt hour equals 1,000 kilowatt hours. Household prices, by contrast, are usually quoted in cents per kilowatt hour. An exchange price of 100 €/MWh therefore equals 10 ct/kWh. On top come network charges, taxes, levies and surcharges, as well as costs for sales, metering, procurement risks and the supplier's margin. This conversion alone shows: the exchange price is an important basis of many electricity costs, but not the price that end customers pay.

Price formation on the short-term electricity market

On the day-ahead market, delivery volumes for the following day are traded. Market participants submit bids: how much electricity they want to buy or sell at what price. In the Europe-wide coupled day-ahead auction (Single Day-Ahead Coupling, SDAC), a common algorithm matches supply and demand from all participating bidding zones. In doing so, it takes the available cross-border transmission capacities into account. The auction takes place daily at 12:00 CET. Since the delivery day of 1 October 2025 (trading day 30 September 2025), its smallest time interval across Europe has been 15 minutes instead of one hour. Ireland is excepted, with 30 minutes. The day-ahead price is therefore now in principle a quarter-hourly price. Hourly or daily averages are key figures derived from it. Bids in hourly or half-hourly resolution remain possible at EPEX Spot.

The result is a price for a specific bidding zone and a specific time interval. Germany and Luxembourg form a common bidding zone. As long as the lines between zones are not fully utilised, the prices of neighbouring zones converge. If a border is fully utilised, prices diverge.

Price formation follows the dispatch order, the merit order. Sell bids are sorted by price in ascending order. Under competition, these bids are usually based on short-term marginal costs. Wind and photovoltaic plants have very low variable costs because they need no fuel. Gas and coal power plants are higher because fuel, CO₂ allowances and other operating costs are incurred. In each time interval, the most expensive bid still needed to meet demand determines the market clearing price. All accepted bids receive this uniform price (uniform pricing). Important: bids are not statements of cost. A power plant with a heat supply obligation, for example, can bid very low, whereas a scarce plant can bid above its marginal costs.

A uniform price does not mean that all plants have the same costs. It only means that within a market area every traded quantity is valued equally in the same time interval. The exchange electricity price therefore does not show the average cost of electricity generation. It shows the value that electrical energy has at a particular point in time under the applicable market rules.

The intraday market complements the day-ahead market. There, market participants can adjust their positions until shortly before delivery, for example if the wind forecast was off, a power plant fails or demand develops differently than expected. Intraday prices can deviate significantly from the day-ahead price because new information and very tight time windows are priced in. The forward market has a different function: there, electricity volumes are traded weeks, months, quarters or years in advance. Forward prices serve to hedge against price fluctuations. They reflect expectations, risk premiums and longer-term fuel and CO₂ prices. Electricity that was not traded in advance and leads to deviations in balancing groups is finally settled via balancing energy. Its prices are not exchange prices.

Distinction from the household electricity price

The exchange electricity price is a wholesale price; the household electricity price is an end-customer price. Several cost components lie in between. Network operators levy network charges for transmission and distribution. The state levies taxes, levies and surcharges, and municipalities receive concession fees. Added to this are the costs of metering point operation. Suppliers also factor in procurement, balancing group management, customer service, billing, payment defaults and their margin.

Falling exchange prices therefore do not automatically and immediately lower the household electricity price. Many suppliers buy electricity on the forward market, partly months or years in advance, and thus smooth out short-term fluctuations. Conversely, high exchange prices do not immediately affect every customer if their supplier bought cheaply early on. The link is closer with dynamic electricity tariffs: there, the energy price per kilowatt hour is tied to the exchange price and rises or falls with it. In Germany, under section 41a paragraph 2 of the Energy Industry Act (EnWG), all electricity suppliers have had to offer a dynamic tariff since 1 January 2025. This applies to final consumers with a smart metering system. Even with dynamic tariffs, network charges, taxes and other components remain. Suppliers must provide information on advantages, disadvantages and risks.

The exchange electricity price is also not the same as the cost of electricity supply. It captures only the price of electrical energy on the wholesale market. Costs for grid expansion, ancillary services, redispatch, reserves, metering infrastructure or support instruments are not contained in it, or only partly. To assess system costs, looking at exchange prices is therefore not enough.

Why the exchange electricity price matters in the power system

The exchange electricity price is an important coordination signal. It indicates when electricity is scarce and when it is plentiful. High prices typically arise with high demand, little wind and sun, tight power plant availability or high fuel and CO₂ costs. Low or negative prices often occur when a lot of renewable electricity meets limited demand and the system does not respond flexibly enough.

For flexible consumers, storage and controllable generators, this signal is real money. Battery storage charges at low prices and feeds back in at higher ones, as far as technology and economics permit. Electrolysers, heat pumps with heat storage, industrial processes or charging points for electric cars can shift their consumption in time, as far as production, comfort, grid connection and regulations allow. The exchange price is therefore closely linked to flexibility, storage and residual load, that is, demand minus feed-in from wind and sun. The quarter-hourly resolution in the day-ahead market also makes visible how strongly prices change within an hour, for example in the morning and evening ramps of photovoltaics.

As the share of weather-dependent generation grows, what the price tells us changes. Formerly, the fuel costs of dispatchable power plants mainly determined the price level. In a system with a lot of wind and photovoltaics, short-term prices fluctuate more strongly with weather, availability, demand and grid bottlenecks. Many cheap time intervals can lie alongside individual very expensive ones. The average price describes this situation only incompletely. For operation and investment, price profiles, price spreads and the frequency of extreme prices increasingly matter.

Typical misunderstandings

A widespread misunderstanding: low or negative exchange prices mean free electricity. In fact, a negative price means that sellers pay for offtake and buyers receive money if they take electricity in that time interval. For end customers, electricity still does not become free, because network charges, levies and supply costs continue to apply. Negative prices also often have technical and institutional causes. Some power plants cannot ramp down arbitrarily quickly. Heat supply obligations can force continued operation. Support rules influence bidding behaviour. And flexible demand is not always available in sufficient quantity or in the right place.

A second misunderstanding equates the exchange price with the generation costs of renewable energies. The fact that a photovoltaic plant produces with very low variable costs does not mean the market price in that time interval must be zero. It results from supply, demand and transmission capacities. Conversely, a high exchange price does not mean that every kilowatt hour was expensive to generate. Many plants receive the same market price even though their variable costs are lower. This difference is not a flaw in price formation. It belongs to a market design that values short-term scarcity uniformly and thereby also refinances fixed costs and investments.

A third misunderstanding concerns space. The price of a bidding zone says nothing about whether the grid within the zone can transport every feed-in and every consumption without restriction. Grid bottlenecks within Germany are not resolved through regionally different exchange prices. After exchange trading, network operators intervene in the operation of plants. This is called redispatch. The formerly separate feed-in management for renewable energy and CHP plants was integrated into the Redispatch 2.0 system on 1 October 2021. Thus the exchange price of the zone can signal surplus while elsewhere in the grid plants have to be ramped up. The electricity market and the electricity grid are closely coupled, but do not represent scarcity at the same level.

Market price, investment and political debates

Exchange electricity prices help determine the revenues of power plants, storage and flexible consumers. For existing plants, they decide when operation is worthwhile. For new plants, they are part of the investment calculation, but rarely the only basis. Wind and solar projects also depend on expected market values, support instruments, long-term power purchase agreements (PPAs), cost of capital and site quality. Firm capacity, storage and flexible consumers need price signals that remunerate their availability and their times of operation. If high revenues come from only very few hours, the risk for investors rises. This gives rise to debates about capacity mechanisms, reserves, the design of network charges and market design as a whole.

The exchange electricity price is thus politically relevant without being a politically set price. Rules determine which bids are permissible, how bidding zones are drawn, how cross-border trading works, in which time intervals trading takes place, how balancing energy is settled and which costs are borne outside the market. The switch of the day-ahead market to 15-minute products shows that these rules continue to evolve. Anyone who wants to understand the effect of exchange prices must take the rules into account. An exchange price is not a natural law of physics. It is the result of an organised market that brings together physical limits, legal requirements and economic bids.

The term exchange electricity price thus denotes a wholesale price for electrical energy defined in time and space. It explains neither the household electricity price alone nor the total costs of electricity supply. Its significance lies in making short-term scarcity, surpluses and expectations tradable. Anyone who uses it precisely separates energy price, network costs, state-imposed price components and ancillary services from one another. Only then do debates about electricity prices, renewable energies, security of supply and flexibility avoid mixing up different levels.

Sources

15-minute products in Market Coupling — EPEX SPOT; unbekannt. Abschnitt „Introduction of 15-minute MTU contracts for Day-Ahead - SDAC“
Successful Implementation of 15-Minute Market Time Unit (MTU) in SDAC — EPEX SPOT / SDAC-Parteien; 2025-10-07. Pressemitteilung, Abschnitt „About SDAC“
§ 41a EnWG – Lastvariable, tageszeitabhängige oder dynamische und sonstige Stromtarife sowie Festpreisverträge — Bundesministerium der Justiz / Bundesamt für Justiz (gesetze-im-internet.de); unbekannt (abgerufen 2026-11-11). § 41a Abs. 2 und 6 EnWG
Dynamische Stromtarife — Bundesnetzagentur; unbekannt. Verbraucherportal, Abschnitt zur Kopplung des Arbeitspreises an den Börsenstrompreis
Festlegung der Mindestfaktoren für „Redispatch 2.0“ — Bundesnetzagentur; 2020-11-30. Abschnitt „Integration des Einspeisemanagements in das Redispatch 2.0“

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Edited by eCMS on 11.11.2026 16:14