S&P Global Platts is proposing to database UK emissions allowance prices and start using them in UK clean spark and dark spread, as well as coal switching price and baseload comparison calculations, effective May 19, 2021.
The UK formally left the EU Emissions Trading System (ETS) on Jan. 1, 2021, as part of the country's withdrawal from the EU, and is currently in the process of setting up its own domestic UK Allowance (UKA) market. The relevant futures contract is expected to start trading on the Intercontinental Exchange from May 19.
Platts clean spark and dark spread calculations measure the profitability of power plants in the UK running on gas and coal, coal switching prices measure the theoretical threshold at which gas is more competitive than coal in power generation, and baseload comparison calculations allow for comparison of the cost of providing baseload power through coal or gas-fired power.
Current calculations factor in prices of European Emissions Allowances, based on the data from the European Energy Exchange (EEX).
The full description of the methodology can be found on the p.6-7 of the European electricity specifications guide: https://www.spglobal.com/platts/plattscontent/_assets/_files/en/our-methodology/methodology-specifications/european_power_methodology.pdf
The affected calculations are published in the European Gas Daily, European Power Daily, on the fixed pages PEP0645, PEP0660, PGN0812, PEP0226 and PGN0813 of the Platts real-time services, and are databased in the EE Market Data Category under the following codes:
UK clean spark spreads, 45%, 50% and 60% efficiency:
UK clean dark spreads, 35% efficiency:
UK coal switching prices, 45% and 50% efficiency:
UK baseload comparison:
Note: CPS = Carbon Price support; DA = Day ahead; MA = month ahead; QA = quarter ahead; YA = year ahead; SA = season ahead; SN = season
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