Texas power spikes set tone for summer
Recent surges in US wholesale power prices are driving debate as to whether current spark spreads are large enough to encourage new build. David Watkins reports
US power markets are set to enter a painful period of price spikes this summer, signalling a need for more supply and transmission build. However, some analysts say spark or dark spreads - the difference between the price of electricity sold and the input cost of natural gas or coal - are currently too low on average for developers to recover capital and a return on investment on a potential new plant, diminishing incentive to build.
Michael Zenker, Barclays Capital's North American gas and power
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