Purchasing Power Efficiently
We analyze heat rate to act on efficiencies in the energy market.
Heat rate measures a power plant’s efficiency. The metric is determined by dividing supplied energy input of gas (MMBtu) by the generated output of electric power (MWh). Power prices float with cost of natural gas, while natural gas pricing can be tied to indexes (e.g. NYMEX, SoCal Border, etc.). Heat rate gives our clients the ability to manage power through greater market transparency and lower price volatility of the gas market.
Heat rate products dampen volatility in the electricity market by customers purchasing gas volumes, either physical or financial in exchange for physical electricity to run their facilities. Major utilities and municipalities that own or contract physical assets utilize this product in the wholesale energy arena. We help clients take advantage of the opportunities in the market provided by heat rate.