Spark Spread

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Spark Spread

In energy financing, the theoretical gross income produced by the sale of a unit of electricity, less the cost of the fuel to produce the electricity. All of the plant's other expenses must come out of the spark spread. It is the benchmark used to gauge the financial health of gas-powered electricity plants. Occasionally, if the spark spread is too low, plants will refrain from producing electricity until it becomes more profitable. Since the Kyoto Protocols, the formula for determining the spark spread must include the financial effects of carbon emissions. This is called the clean spread. See also: Dark spread.
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References in periodicals archive ?
In the nine months to September 2018, growth was supported by cost savings (EUR15 million) and the consolidation of ACAM and Recos (EUR20 million in total), while organic growth and higher hydro volumes (EUR24 million in total) more than offset the negative effect of the reduction in spark spreads. In the same period, free cash flow was positive by around EUR160 million, but after acquisitions (and the related debt consolidation) group net debt was broadly in line with FYE 2017 at around EUR2.970 million.
I suspect that current spark spreads are around about zero (they certainly were a year or so ago) which means that 44 [pounds sterling]/ MWh would probably pay for not much more than the gas consumed by a combined-cycle gas turbine.
Conectiv Energy had another strong quarter as our generating assets capitalized on higher spark spreads and capacity prices.
Its power generation segment is expected to be around break even in the second half, with the result impacted by lower realised spark spreads and higher levels of plant outages.
If these engineers are involved with the electric utility industry, they will mention the "spark spreads" between natural gas and electricity and the short-term management of peak-load plants and microturbines.
These difficulties include supply and demand issues and weak spark spreads - the difference between the price of electricity and the cost of fuel used to produce it.
This credit deterioration largely reflects a continuation of weak UK power prices and spark spreads during 2015.