Can Lightening occur in Space?
Depends on what you mean by "lightning". Yes, because charge can flow across vacuum, but No,because you won't see anything.
Lightning is a sudden electrostatic discharge between regions of differing electric potential. It has been observed on Venus, Jupiter and Saturn, as well as Earth. In space, there is little material to act as a conductor of charge, so traditional lightning is probably rare. Processes similar to lightning have been observed in electro-magnetic fields around black holes, as well as in highly ionised clouds of gas and dust called Nebulae.
The visual effect that you see in the sky is actually a luminescent plasma that is left in the wake of the charge moving through the atmosphere. No atmosphere, no plasma, no light.
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