Spectron brokers first UK dark spread

The first brokered UK dark spread has been traded through UK-headquartered brokerage Spectron. The trade, between Sempra and Scottish Power was a Summer ‘06 deal, representing 5,000 tonnes of coal (API#2) versus 15 MW of electricity. It is understood to be the first brokered dark spread in Europe, Spectron said.

Dark spreads represent the generating margin of coal-fired power stations and are calculated from the difference between power prices and coal prices, adjusted for fuel efficiency. “An efficiency ratio of 31.38% was used in the trade and looks set to become the standard, as this corresponds to a conversion rate of exactly 15 MW for every 5,000 tonnes of coal,” Spectron said in a statement.

Dark spread interest has been steadily growing as traders have sought hedging and risk management tools for