Spark spread

The spark spread is the theoretical gross margin of a gas-fired power plant from the sale of one unit of electricity and the purchase of the units of gas that is required for production. All other costs (operation, maintenance , capital and other costs ) must be covered by the Spark Spread.

The term dark spread describes the corresponding gross margin for coal-fired power plants .

These indices are regularly included in published market reports. They are useful for following the price development on energy markets , benchmarking the performance of your own power plant and occasionally also for the content of political discussions. The higher the spark or dark spread, the more profitable the ideal gas or coal-fired power plant.

For the operative published Spread indices are insufficient use optimization or for investment decisions. The technical properties, the efficiency and the available market access of the individual system must be taken into account (see power plant utilization optimization ).

Clean spread indicators also take into account the price of the CO ₂ certificates that are required to produce electricity for the unit.

Calculation of Spark Spread and Dark Spread

The Spark Spread S is defined as follows:

${\displaystyle S=P_{E}-{\frac {P_{G}}{\eta _{el}}}}$

Here, P _{E is} the electricity price, P _G the gas price and η _el the electrical efficiency of a typical gas power plant. All prices must be in the same unit, e.g. B. € / MWh. To calculate the dark spread, a coal price P _{K is} used instead of the gas price P _G.

The publication of spark spreads and dark spreads should be accompanied by a precise specification of the calculation logic. The following should be specified:

• the efficiency used
• the exact energy prices used (marketplace, product, source of price information)
• other costs taken into account

Since the efficiency usually relates to the calorific value H _i , but the gas prices to the calorific value H _s , the gas prices must be converted to H _i . Determining the electrical efficiency is critical for the result. In reality, every gas-fired power plant has a different degree of efficiency from 45% to over 60%; an electricity generation scenario with an average gas-fired power plant is used for the spark spread. In Germany, a value of 50% is common. 49.13% has established itself in the UK. In the USA, a fuel input (“heat rate”) of 7000 BTU / kWh is often used, which corresponds to an efficiency of 48.74%.

Calculated on the EEX base electricity and gas standard contract (tape delivery over a delivery year), the spark spreads in Germany have been negative since around mid-2012. This means that belt operation does not currently pay off for a typical gas power plant. The clean dark spreads currently (September 2017) look positive, whereas the clean spark spreads have not recovered.

The dark spread is generally higher than the spark spread. This reflects the fact that a coal-fired power plant has low fuel costs and thus higher profit margins, but also has high specific investment costs that have to be brought in through the dark spread, while the opposite is true for a gas-fired power plant. The relatively high marginal costs and low spark spreads of a gas-fired power plant characterize it as a peak load power plant, which primarily produces in just under hours with high demand if the current hourly price is above the base price, which is used as a reference for the dark spread.

Clean spread

In countries that are affected by EU emissions trading , power plant operators have also had to take the costs of CO ₂ into account since 2005 .

For the calculation of the so-called clean spark spread, an emission factor of 0.2 tCO ₂ per MWh of natural gas is usually used . H. the clean spark spread C results from the spark spread S as:

${\displaystyle C=S-{\frac {0,2\cdot P_{C}}{\eta _{el}}}=P_{E}-{\frac {P_{G}+0,2\cdot P_{C}}{\eta _{el}}}}$

Here P _{E is} the electricity price, P _G the gas price, P _C the CO ₂ price and η _el the electrical efficiency of the power plant.

A clean dark spread can also be defined in the same way . A higher demand for CO ₂ certificates per MWh of fuel is expected here; for hard coal, the emission factor of 0.34 tCO ₂ / MWh is usually used .

If the prices for CO ₂ certificates are high , the clean dark spread could be lower than the clean spark spread. In this case, the marginal costs of the gas-fired power plant would be lower than those of the coal-fired power plant, and gas-fired power plants would also have priority over coal-fired power plants in the base load. The marginal price for CO ₂ certificates, at which the marginal costs are the same, is sometimes quoted or calculated as the fuel switch price . Furthermore, the gas price level is viewed as a so-called switch level in the gas market as a function of the coal price, at which it is just as expensive to produce a unit of electricity with gas as with coal. If the market price for gas is close to the switch level, the electricity market and gas market show strong interactions.

Individual evidence

1. ↑ ^{a b} European Energy Markets Monthly - September 2016. (PDF) In: EUROPEAN ENERGY MARKETS MONTHLY. Axpo Trading AG, September 2016, accessed on February 25, 2018 (English): "The Spark spread value is calculated as the power price (Base) minus PSV gas price (converted to lower heating value by multiplying with 1.108), then dividing by an assumed average plant efficiency of 50%. " 
2. ↑ EnBW Investor Factbook September 2017. (PDF) EnBW Energie Baden-Württemberg AG, September 2017, accessed on February 25, 2018 . 
3. ↑ An introduction to spark spreads. In: Today in Energy. US Energy Information Administration, February 8, 2013, accessed February 25, 2018 . 
4. ↑ Frank Mastiaux, Thomas Kusterer, Ingo Peter Voigt: Conference call on fiscal year 2012. (PDF) EnBW Energie Baden-Württemberg AG, March 1, 2013, accessed on February 26, 2018 . 
5. ↑ Andreas Franke: German year-ahead coal-fired power generation margins hit 2017 high. S&P Global Platts, September 12, 2017, accessed on February 18, 2018 (English): "The German year-ahead clean dark spread (CDS) for a 45% efficienct coal plant rose to Eur 6.85 / MWh Monday from Eur 5.63 / MWh at the start of August and from below Eur 5 / MWh at the start of 2017, the data shows. At the same time, the German year-ahead clean spark spread (CSS) for a 50% efficient gas-fired plant fell slightly to minus Eur 1.89 / MWh, with the spread between modern coal and modern gas plants widening again above Eur 8 / MWh. " 
6. ↑ Helmuth-M. Groscurth, Sven Bode: Incentives for investments in conventional power plants. (PDF) In: Discussion Paper. arrhenius Institute, February 2009, accessed on September 3, 2016 . 
7. ↑ Volker Quaschning: Specific carbon dioxide emissions from various fuels. June 2015, accessed February 26, 2018 . 
8. ↑ Emissions trading. (PDF) European Federation of Energy Traders, accessed on September 3, 2016 .