On December 25, 2012, German power traders woke up to find that their world had been turned, if not upside down, then at least negative. For the first time since 2009, the average of German day-ahead base-load power contracts cleared at negative prices, reaching –€56.87 (–$73.87) per megawatt hour (/MWh) on Paris-based exchange Epex Spot (see figure 1). In the intra-day power market, prices were even more extreme, with some time periods trading at –€500/MWh (see figure 2).

A combination of