spark spread investment & finance definition

The difference between the market price of electricity or natural gas and its production costs. To calculate the spread, the heat rate of a generating unit or power system is multiplied by the cost of energy measured in dollars per BTUs (British thermal units). If the spread is small, production may be stopped until more profit is possible. The spread takes into account the market price of power and whether it makes economic sense for power to be produced. It doesn’t measure how efficiently the power can be produced.