#Spark in the dark steam generator#

There is also variation in average spark spread levels across regions: New York City tends to have relatively high average spark spreads, while in the Pacific Northwest, a low average spark spread reflects low average power prices (because of an abundance of low-cost hydropower, particularly in the late spring and early summer). Power prices formed in Regional Transmission Organizations (New York City and Chicago in the chart above) tend to be spikier than those formed in markets featuring bilateral trading between market participants (Pacific Northwest and Southeast). Spark spreads tend to be fairly volatile, more so than crack spreads in petroleum markets, largely because of the volatility of wholesale electric power prices, which vary widely with changes in demand for electricity and the available electric supply. The chart above shows spark spreads during 2012, calculated for four locations around the United States. It is typically calculated using daily spot prices for natural gas and power at various regional trading points.

#Spark in the dark steam generator#

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. The spark spread is a common metric for estimating the profitability of natural gas-fired electric generators. Energy Information Administration, based on SNL Energy.