The Spark Spread (or Spark Spreads) 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.
Source: US Energy Information Administration
ESAI Power’s latest Energy Watch PJM market update includes our current 10-year forecast for power and natural gas prices across PJM. This update is based on ESAI’s fundamental long-term view, along with forward market prices for the initial years. ESAI Power’s latest PJM Energy Watch report includes both our detailed Near-Term and Long-Term outlooks.
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