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The Spark Spread as a Measure of Economic Viability for a Combined Heating and Power Application With Ideal Loading Conditions

[+] Author Affiliations
Rhett D. Graves, B. K. Hodge, Louay M. Chamra

Mississippi State University, Mississippi State, MS

Paper No. ES2008-54203, pp. 167-171; 5 pages
doi:10.1115/ES2008-54203
From:
  • ASME 2008 2nd International Conference on Energy Sustainability collocated with the Heat Transfer, Fluids Engineering, and 3rd Energy Nanotechnology Conferences
  • ASME 2008 2nd International Conference on Energy Sustainability, Volume 1
  • Jacksonville, Florida, USA, August 10–14, 2008
  • Conference Sponsors: Advanced Energy Systems Division and Solar Energy Division
  • ISBN: 978-0-7918-4319-2 | eISBN: 0-7918-3832-3
  • Copyright © 2008 by ASME

abstract

“Spark spread” refers to the difference between the cost of electricity and the cost of fuel on a per-MMBTU basis. This metric is often considered when recommending equipment retrofits that require fuel switching. A spark spread of at least $12 per MMBTU is considered the threshold for economic viability of Combined Heat and Power (CHP) systems. However, this study shows that an increase in the electric utility rate has an impact on the spark spread required to maintain the economic viability of a CHP project. This challenges the paradigm that a single value for spark spread can be used as a “rule of thumb” for determining the economic viability of CHP projects. As utility rates increase, so does the importance of understanding the relationship between spark spread and the economic viability of projects.

Copyright © 2008 by ASME

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