Spark spread

{
  "id": "MLC-T-ENE-002142",
  "term": "Spark spread",
  "field": "Energy",
  "definition": "A measurement of the difference between the price that a generator can obtain from selling one megawatt hour (MWh) of electricity and the cost of the natural gas needed to generate the MWh of electricity. Spark spread is a measure of potential profit for generating electricity on a particular day.\n\nA key component in the spark spread equation is the heat rate (measure of efficiency) of the generating unit. A common measure for heat rate used in the trade press is 7,000 Btu/kWh. This heat rate is broadly representative of the efficiency of newer natural gas combined-cycle power plants. (By way of comparison, a plant that has a 50% efficiency rate has a heat rate of 6,824 Btu/kWh.) The most efficient natural gas combined-cycle power plants have heat rates somewhat below the 7,000 Btu/kWh threshold; they can make money even when the implied (breakeven) heat rate is a little below 7,000 Btu/kWh. Conversely, as the level of plant efficiency decreases, the spark spread diminishes - thus, older, less efficient plants have lower spark spreads than those with a heat rate of 7,000 Btu/kWh.",
  "subject": "Electricity",
  "references": [
    "EIA Glossary"
  ],
  "url": "https://mlchart.com/terminology/energy/spark-spread/"
}