Clean spark spread reaches €74

The clean spark spread is the profit a gas power plant earns per megawatt-hour it generates, after paying for the gas fuel and for EU carbon pollution permits. When the price of electricity is high and the price of gas and carbon is low, the spread is wide and generators make good money. When the price of electricity is low or gas and carbon are expensive, the spread can go negative, meaning operators lose money on each unit of electricity they produce. On 30 June, three things aligned to produce the widest spread since early June: electricity prices reached €195 per megawatt-hour because wind was almost absent and demand was high; gas prices stayed at €40-44 because Gulf tensions had eased; and EU carbon permits recovered to €80 per tonne. A generator burning gas to make one megawatt-hour of electricity paid about €88 for fuel and €32 for carbon permits, leaving a gross margin of about €74. Three weeks earlier, the same calculation gave a loss of €8-9 per megawatt-hour. The difference is almost entirely the electricity price: it was €70 higher on 30 June than on 8 June.