Definition
The difference between the market price of electricity or natural gas and its production costs. The spark spread if often used to determine the financial stability of a power plant and gauge if the company should produce more or less electricity based on the figures. The formula for spark spread is: Price of Electricity - [ (Cost of Gas) * (Heat Rate) ] = $/Mwh - [ ($/MMBtu) * (MMBtu / Mwh) ]
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