Five NASA satellites from the THEMIS mission were recently able to closely witness the chain of events that occurs to create the northern lights for the first time. Complex stuff going on here, but it involves the Earth's massive electromagnetic fields being stretched to their limits by magnetic bombardment from the sun, and then snapping back into place like giant rubber bands, all of which the five THEMIS birds were able to witness at precisely the right moment. Awesome.
"Explosions of magnetic energy a third of the way to the moon," says NASA, "power substorms that cause sudden brightenings and rapid movements of the aurora borealis...We discovered what makes the Northern Lights dance." The process is called magnetic reconnection (check back to that incredible video of visible magnetic field lines for a general idea) and when we're talking about the fields generated by the whole Earth, it involves a lot of energy. When the fields snap around like rubber bands, charged particles collide with atmospheric gasses and release visible light energy, and boom, aurora borealis: