THEMIS space probes discovered that the Northern lights are seen when electrical tornadoes, rotating faster than a million miles an hour, hover about 40,000 miles (60,000 km) above the earth. The energy spins down to the Earth's ionosphere where the tornadoes become unstable, and interact with the Earth's magnetic field.
Professor Karl-Heinz Glassmeier, director of the Institute for Geophysics and Extraterrestrial Physics in Braunschweig Germany, explains, "When these space tornadoes reach the upper atmosphere their enormous energy heats the air so strongly it starts glowing. That is what generates the aurorae."
"It is here that all the energy is released, forming the aurorae. What we see as beautiful lights and colors are actually the product of a violent electrical storm in space. While these electrical discharges do not cause any direct harm to humans, they can damage man-made structures such as power transformers and communications systems," said Andreas Keiling, a physicist at the University of California at Berkeley.
Time History of Events and Macroscale Interactions during Substorms (THEMIS) are five probes launched by NASA in February 2007, which orbited Earth recording the volume and electrical current which was higher than 100,000 amperes.
Scientists had previously concluded that aurorae are caused by electrically charged particles discharged as solar winds from the sun which interact with the Earth's magnetic field. However, these solar discharges strike the Earth where the sun is shining and the aurorae occur in the opposite hemisphere and are visible in the night sky.
This anomaly was cleared up by THEMIS satellites which showed that the Earth's magnetic field held the charged particles before deflecting them from the day side of the planet across to the opposite side of the planet where the particles massed into huge clouds. There the accumulated charge expands continuously until finally the cloud becomes unstable releasing its energy as a geomagnetic tornado which travels down towards the earth along magnetic field lines becoming visible as aurorae in the sky. 
The scientists presented their findings at the European Geosciences Union (EGU) in Vienna, Austria just this week.

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Aurora Borealis caused by electrical space tornadoes