Why the price is what it is: the fuel on the margin

The single most expensive power plant needed to keep the lights on sets the wholesale price for everyone. That plant is the "marginal fuel" — usually gas — which is why a gas-supply shock thousands of kilometres away shows up on a German electricity bill.

When gas sets the electricity price, the wholesale price tracks the cost of running a gas plant. Comparing each day's German price to a modelled gas marginal cost over the 12 months to July 2026, gas appears to have set the price on about 66% of the 357 days classified, and renewables on about 4%.

A model, not a measurement.

This is a MODEL, not a measurement. The marginal fuel is inferred from the wholesale price versus a modelled gas (CCGT) marginal cost — not observed directly. The gas series is the World Bank TTF benchmark (monthly, CC BY 4.0), converted to €/MWh with ECB rates — a monthly benchmark, not the day-ahead spot a plant actually pays. CO2 is a curated EEX EUA value. Change the assumptions and the picture changes.
Price vs the gas marginal cost
Wholesale price (ENTSO-E, measured) Gas marginal cost (modelled) Gas price (TTF, World Bank)
What sets the price
Merit-order inference over the classified period
What this is, and isn't

This view crosses a line Wattlas usually holds: everything else on the site is measured ENTSO-E data; this one is a merit-order inference. We label it loudly so you can weigh it accordingly.

  • The gas series is the World Bank “Pink Sheet” TTF benchmark (Netherlands Title Transfer Facility), monthly, published under CC BY 4.0 and converted from USD/mmbtu to €/MWh with ECB reference rates. It is a monthly benchmark, not the day-ahead spot a plant actually pays.
  • CO2 is a curated EUA value from EEX primary auctions — a slow-moving input stated as-of a date, not a live feed.
  • The marginal-fuel split is an inference: we compare each day's wholesale price to the modelled gas marginal cost and attribute the day to gas, renewables, or "other". It carries assumptions about plant efficiency, fuel cost, and bidding we cannot fully validate.

For the things we do measure straight from ENTSO-E: see the Mix for actual generation by fuel type, and Carbon on the dashboard for production-based carbon intensity.

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