A heatwave knocked out Europe's cheap power, and the price jumped for everyone

The number that shouldn’t add up

French electricity jumped 21.8% in a single day this week. Not because the plants got older or the fuel got dearer overnight. A heatwave rolled in, and the price of power leapt more than a fifth.

To understand why, you have to stop picturing a market where each seller names their own price. A power grid does not work like a farmers’ market. It works like an auction with one strange rule, and that rule explains the whole thing.

The stack, cheapest first

Every hour, a grid stacks up its plants from cheapest to run to most expensive. Wind and solar cost almost nothing once built - no fuel to burn - so they go first. Then nuclear. Then gas. Last of all, the “peaker” plants, kept idle most of the time and fired up only when nothing else can meet demand.

The grid adds plants up this ladder until supply finally meets demand. Then it stops. The last plant it had to switch on is the marginal plant - the one at the very edge of what was needed.

Here is the strange rule: that last, most expensive plant sets the price for every plant that hour. Not just for its own power. For all of it. The cheap wind farm that cleared the market first gets paid the same high price the peaker demanded.

What the heat actually did

Now the heatwave makes sense. It hit both ends of the stack at once.

On the demand side, air conditioning and fans ran flat out, pushing the line the grid had to reach further up the ladder. On the supply side, the heat knocked out the cheap plants. French reactors need river water to cool, and the rivers ran hot - 7.3 gigawatts of nuclear, about a twelfth of the fleet, dropped away. Romania shut its last reactor as the Danube fell to record lows. The wind went still.

So the grid climbed higher up its ladder to meet a bigger demand with fewer cheap rungs. The plant that ended up at the margin was dear gas - and gas is costly right now, held high by the closed Strait of Hormuz. That gas plant set the price. Everyone paid it.

No single plant got more expensive. A more expensive plant simply moved to the edge of what was needed, and priced the whole market from there.

Once you see it, it’s everywhere

The pattern is not really about electricity. It is about any market where a single clearing price gets set by the last unit needed.

Hail a ride at 2am when the roads are empty of cars, and the last driver’s premium sets the fare multiplier for everyone. The last airline seat sold before a full flight lifts the price the whole cabin’s late buyers pay. One desperate over-bid on a quiet street resets what the next valuer calls every house on it worth. In each case the marginal unit - the last one needed - quietly prices everything behind it.

The other face of the same rule

There is a fairness inside this that is easy to miss. The rule that punished Europe this week is the same rule that rewards clean power the rest of the time.

On an ordinary breezy afternoon, cheap wind and solar pour into the stack and shove gas off the top. The marginal plant becomes something cheaper, and the price for everyone falls. Across 2026, Europe’s wind and solar are on track to out-generate gas for the longest run on record. Most days, that pushes prices down.

The spikes come only when the cheap rungs vanish and demand climbs together - the still, dark, hot evenings. The fix is not to abandon the rule but to fill those gaps: storage that banks cheap midday power for the pricey evening. Europe’s largest battery just switched on in Scotland.

We stand at the far end of this ladder, holding the bill. The price on an August evening was set by one gas plant most of us will never see, in a decision no single household was part of. That is worth sitting with. Not because someone rigged it, but because a rule we all live under quietly connects a hot day in one country to a stranger’s meter in another. And few of us ever chose it.