Energy Environmental Blog

Spark Spreads

Written by Greg Russell | Feb 11, 2013 1:44:19 PM

The Energy Information Administration (EIA) has a good introduction to the concept of spark spreads:  "The spark spread is a common metric for estimating the profitability of natural gas-fired electric generators. The spark spread is the difference between the price received by a generator for electricity produced and the cost of the natural gas needed to produce that electricity. It is typically calculated using daily spot prices for natural gas and power at various regional trading points."

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