Course 10 of 20 · Power and Electricity Desk Academy

Thermal Generation, Spark Spreads & Tolling

Stage C, Commercial exposure and hedging. Level 5 of 10.

Spark and dark spread construction, heat rate sensitivity and tolling agreement economics.

123 chapters · 11 modules · every chapter one 8 to 10 minute explainer · builds on: Course 03, Course 04, Course 05

Enrol or enquire See the 123 chapters
How a chapter is sized

One chapter is one idea taken to the point of use

Each chapter is a single self-contained explainer of 8 to 10 narrated minutes, covering one idea to the point where you can use it.

Chapters run in order. Each one assumes only what the chapters before it taught, and capability belonging to a later course is named and deferred rather than half-covered.

Curriculum

11 modules · 123 chapters

Open any module for its full chapter list, in teaching order.

M0 The Thermal Unit as a Commercial Object Ch 1-10
  1. What a Thermal Plant Sells and What It Buys
  2. The Generator Who Is Also a Fuel Buyer
  3. Why Power and Fuel Prices Move Apart
  4. The Margin Hidden Between Two Commodity Curves
  5. Who Owns Thermal Plant and What Each Owner Wants
  6. The Asset Manager, the Trader and the Control Room
  7. Where the Money on a Gas-Fired Unit Actually Sits
  8. Merchant Operation Against Contracted Conversion
  9. Three Questions Every Thermal Desk Answers Daily
  10. The Route From One Megawatt to a Signed Toll
M1 Heat Rate: The Number That Converts Fuel Into Power Ch 11-22
  1. Heat Rate Defined Without the Engineering
  2. Efficiency and Heat Rate as Two Views of One Fact
  3. The Units a Heat Rate Can Be Quoted In
  4. Higher and Lower Heating Value Conventions on a Unit
  5. Gross Output, Net Output and Auxiliary Load
  6. Average Heat Rate Against Incremental Heat Rate
  7. The Heat Rate Curve Across the Load Range
  8. Reading a Manufacturer Performance Curve
  9. Ambient Temperature, Pressure and Humidity Effects
  10. Conversion Degradation Between Major Overhauls
  11. Tested Heat Rate Against Contracted Heat Rate
  12. Choosing One Heat Rate Number for Commercial Use
M2 Building the Spark Spread Ch 23-34
  1. The Gross Spark Spread in One Line
  2. Choosing the Reference Heat Rate for a Quoted Spread
  3. Which Fuel Price Belongs in the Spread
  4. Normalising Everything to One Megawatt Hour
  5. Adding the Carbon Cost to Reach a Clean Spread
  6. Variable Operating Costs Inside the Spread
  7. The Spread Net of Delivery to the Plant Gate
  8. Plant-Specific Spread Against Market-Quoted Spread
  9. The Implied Market Heat Rate
  10. Reading the Implied Heat Rate as a Dispatch Signal
  11. A Worked Spark Spread, Part One: Assembling the Inputs
  12. A Worked Spark Spread, Part Two: Reading the Result
M3 Dark Spreads, Coal and the Switching Price Ch 35-45
  1. The Dark Spread and the Coal-Fired Unit
  2. Coal Heat Rates and Why They Sit Higher
  3. Converting a Coal Quotation Into a Spread Input
  4. The Clean Dark Spread
  5. Why Carbon Hurts One Fuel More Than the Other
  6. The Spread Between the Spreads
  7. The Coal to Gas Switching Price
  8. The Switching Range Across a Fleet
  9. A Worked Switching Decision Across Two Units
  10. Oil-Fired and Dual-Fuel Units at the Margin
  11. Biomass Co-Firing and Other Thermal Variants
M4 Heat Rate Sensitivity and the Spread's Moving Parts Ch 46-56
  1. Why a Small Conversion Error Costs Real Money
  2. Differentiating the Margin With Respect to Conversion
  3. Building the Sensitivity Table for One Unit
  4. Sensitivity to the Electricity Price
  5. Sensitivity to the Fuel Price
  6. Sensitivity to the Allowance Price
  7. Which Input Error Dominates a Thin Margin
  8. The Same Unit When the Margin Is Wide
  9. Degradation Priced Over a Year of Running
  10. Summer Derating and the Margin It Removes
  11. A Sensitivity Review Before a Heat Rate Is Contracted
M5 Start Costs, Minimum Run and the Spread You Cannot Reach Ch 57-67
  1. What One Start on a Thermal Unit Costs
  2. Hot, Warm and Cold Starts Compared
  3. Amortising a Start Over the Hours It Buys
  4. The Breakeven Run Length for a Started Unit
  5. Minimum Stable Generation and the Hours It Forces
  6. The Hours a Minimum Run Quietly Removes
  7. Ramp Limits and the Hours They Consume
  8. Start Allowances and the Cost of Cycling
  9. Running Through a Negative Hour to Protect a Position
  10. The Positive Margin Hour You Cannot Capture
  11. A Worked Start Decision on a Two-Shift Day
M6 Running the Unit Against the Spread Ch 68-78
  1. The Hourly Run Decision Reduced to One Threshold
  2. Building the Day's Margin Curve From Hourly Prices
  3. Turning the Margin Curve Into a Run Plan
  4. Two-Shift Operation and the Midday Trough
  5. Part-Load Running and the Margin It Earns
  6. Choosing an Output Level Rather Than On or Off
  7. Matching the Fuel Purchase to the Run Plan
  8. When the Fuel Is Already Bought
  9. Rebuilding the Margin Curve When Fuel Moves
  10. A Worked Dispatch Day, Part One: The Plan Before Delivery
  11. A Worked Dispatch Day, Part Two: What the Unit Actually Did
M7 The Forward Spread and the Generation Margin Ch 79-89
  1. The Forward Conversion Margin Curve
  2. Seasonal Shape in the Forward Margin
  3. The Margin as a Tradeable Forward Quantity
  4. Locking a Season of Conversion Margin
  5. The Generation Margin Budget for One Unit
  6. Revaluing the Budget as Curves Move
  7. Margin Capture Against Theoretical Margin
  8. Why Realised Earnings Fall Short of the Forward Curve
  9. Attributing the Gap to Outage, Limit and Conversion
  10. The Margin Nobody Quotes
  11. Where the Flexibility Value Is Priced
M8 Tolling Agreements: The Contract Architecture Ch 90-101
  1. What a Tolling Agreement Is and Who Signs One
  2. The Toller and the Owner: Two Different Exposures
  3. Who Supplies the Fuel and Who Carries That Risk
  4. The Capacity Payment in a Toll
  5. The Energy Payment for Converted Megawatts
  6. The Contracted Heat Rate as a Commercial Promise
  7. Heat Rate Testing and the Agreed Procedure
  8. Availability Guarantees in a Tolling Agreement
  9. Dispatch Rights, Notice Periods and Call Limits
  10. Start Allowances Written Into the Toll
  11. Pass-Through Items and Fee Escalation in a Toll
  12. Reading an Unfamiliar Tolling Agreement in One Pass
M9 Tolling Economics From Both Sides Ch 102-112
  1. Why a Toller Pays for Conversion at All
  2. What the Owner Gives Up by Tolling
  3. The Breakeven Conversion Fee
  4. Valuing the Toll Against the Forward Curve
  5. The Guaranteed Figure Against the Achieved Figure
  6. Liquidated Damages, Bonuses and the Performance Band
  7. Availability Shortfall and the Compensation Mechanism
  8. The Toll Through a Weak Margin Year
  9. The Toll Through a Year of Scarcity
  10. A Worked Toll Valuation, Part One: The Owner's View
  11. A Worked Toll Valuation, Part Two: The Toller's View
M10 The Unit End to End and the Limits of the Spread Ch 113-123
  1. An Integrated Case, Part One: The Machine and Its Curves
  2. An Integrated Case, Part Two: A Year of Running
  3. An Integrated Case, Part Three: The Margin Reconciled
  4. Merchant Running and a Signed Toll Side by Side
  5. The Margin Review Pack for a Plant Owner
  6. Explaining a Missed Margin Without Excuses
  7. Common Errors in Spread Construction
  8. What the Conversion Margin Cannot Tell You
  9. Where a Margin Model Misleads a Desk
  10. Threads a Thermal Desk Hands On
  11. Closing the Loop on Conversion Margin

The brochure gives each of these 123 chapters a paragraph on what it covers and what you can do once you have worked through it.

This is course 10 of twenty

It stands alone, and it is also the entry point to the Power and Electricity Desk Academy pathway.

Enrol or enquire See the whole pathway