UK needs higher spark spread

Wednesday, May 16, 2012

The UK needs a spark spread of GBP8/MWh ($12.86/MWh) for gas-fired power plants to be viable, RWE UK CEO Volker Beckers told lawmakers Tuesday, but used the opportunity to call for a market based framework rather than capacity payments to stimulate further investment.

Average daily power plant gas-burn in the UK so far in May was 32 million cubic meters, down from 55 million cu m in May 2011 and 76 million cu m for the month in 2010, Bentek Energy data showed.

Energy market analyst for Bentek, Oliver Sanderson said, "gas prices are currently so high in regards to power prices, which are being pulled down by coal that there is a clear rationale for mothballing gas fired plants, especially the older ones."

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