Return to top. The spark spread table in the newsletter measures the price of electricity relative to the price of gas on the daily spot markets. It should be seen as an economy spread or avoided cost. The table calculates the cost of generating electricity using gas turbines that operate at various efficiencies, beginning with a highly efficient turbine which only requires 7 mmBtu to generate a megawatt hour, down to a turbine that requires 12 mmBtu to get the same unit of power. The 7 mmBtu is referred to in the spark spread table as 7,000 mBtu, known as its heating efficiency or heat rate in making electricity.
Negative numbers indicate gas is more expensive than power.
Spark spreads look at a very simple world, however, one where the turbine sits next to the switchyard, and both sit on top of a natural gas pipeline. There are no transaction costs and no transmission or transportation costs. The table also assumes that every peaking plant is natural gas-fired, and that gas turbines operate at only four standard heat rates. The world isn't like that, but the spark spread is still a useful way to view the energy marketplace and benchmark relative energy costs. Forward Prices Transactions for terms longer than one day have been published since December 1998, and with the new Market Report format initiated in September 1999, forward price information has been part of the main price table.