​Germany has the deepest and most liquid intraday market in Europe. Currently, batteries can substantially increase their revenues by participating in the intraday continuous market: constant retrading provides non-physical, or “churn,” revenue, and price squeezes allow them to exploit more extreme intraday spreads.

But as we see in ancillary markets, batteries tend to cannibalise markets with limited depth where flexibility is key. With next to no intrinsic marginal cost, large numbers of batteries will start bidding against one another, meaning prices can’t spike to scarcity levels as easily and will stay closer to their fundamental level.

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Key takeaways

• Removing DA reshaping (cutting hourly products into better-fitting 15-minute blocks) in October 2025 cut ID3 outright volatility by 9% and reduced deviation from day-ahead prices by 13%.
• Price squeezes still occur in the last hour before delivery, when only fast-reacting assets can respond to errors in renewable forecasts.
• The intraday order book currently has thin liquidity near the market price. A sudden imbalance of even a few hundred MW can trigger sharp spikes as gas peakers name their price.
• By 2030, roughly 16 GW of BESS faces a mean absolute forecast error of around 4 GW per settlement period. BESS can absorb most of this before scarcity pricing kicks in.
• As BESS projects compete with each other, they bid closer to fundamental value rather than shadow gas bids, introducing more buffer before intraday prices spike.

Why intraday prices form the way they do

Two main factors determine intraday prices in Germany. First, the intraday market is used for correcting day-ahead forecast errors: with 190+ GW of intermittent capacity on the system, even small weather shifts leave gaps between expected and actual generation that must be closed before delivery. Second, because the intraday continuous market is a traded market, it is characterised by price squeezes. When a sudden shortfall, for example from a generator tripping, hits a thin order book close to delivery, prices can move well beyond what fundamentals alone would justify.

Until October 2025, there was a third function: reshaping. Most renewable output was sold day-ahead in hourly blocks, so producers re-traded into cleaner 15-minute products in the intraday market. When the day-ahead auction switched to 15-minute products, that need disappeared overnight.

The effect is visible in prices. The outright volatility of ID3 prices (meaning the volume-weighted average price of the three hours before delivery) fell by 9%. Further, looking at the deviation of each intraday price window from its day-ahead price, the market calmed: the standard deviation of this difference dropped by 13%.

At the same time, forecast error remains as strong as ever. Forecast quality has not improved significantly over the last few years, apart from the eradication of some bias in load forecasting. And while fewer MW now need to be shifted in the market, the fundamentals behind market spikes haven’t changed.

Why prices still spike in the last hour

Renewable forecasts are typically credible only close to delivery, with most renewable traders repositioning using forecasts 1h or 30 min before delivery. That means only certain assets can respond when those forecasts shift: coal assets have limited flexibility to react quickly to price spikes, while gas has more flexibility.

A gas plant running at 80% capacity factor can adjust output quickly in either direction. That same plant sitting cold is unlikely to bid at all, or will demand an extreme price to justify a cold start and the associated wear on the plant.

BESS sits in a different category. No fuel cost, no startup penalty, no mechanical wear from ramping. If the grid operator doesn't inhibit ramping, the battery can ramp to full output in seconds. The only constraint is the state of charge, which changes through the day depending on earlier dispatch decisions. This means a battery can respond within minutes to a late forecast revision, whereas a cold gas plant simply cannot.

The pool of assets able to respond to sudden, last-hour imbalances is therefore limited. When that pool cannot cover the shortfall, prices spike.

The order book shows why spikes are easy to trigger

The intraday market is a continuous order book where bids and offers update as circumstances change. A gas plant that decides to run in the afternoon can revise its offers for evening settlement periods. A battery with a low state of charge from morning activity can shift its bids for later hours. The book constantly adjusts to new information.