Introduction to Heat Rates, Spark Spreads, Tolling Deals, PPAs, and Heat Rate Linked Power Transactions
EJS-304
With the increase in natural gas-fired generation needed to support data centers, these concepts and terms will increasingly be part of your world. Make sure you are prepared.
This seminar begins by explaining operating heat rates, economic heat rates, spark spreads, market implied heat rates, negotiated heat rates, and how to convert natural gas/electricty prices and quantities into equivalent units. The fundamentals of tolling deals and power purchase agreements ("PPAs") are then addressed.
The course next introduces the powerful technique of heat-rate-linked power transactions which can be used in many ways. For example, heat rate structres can be used to sell solar and wind power under PPAs; financially hedge electricity price risk with liquid natural gas financial products; mimic physical generating assets; and potentially structure profitable arbitrage transactions between the natural gas and electric power markets.
This proven online training program features the same material used in the popular PGS in-person classroom seminar. Register today and join the thousands of industry professionals who trust PGS for their energy training needs.
- What operating and market implied heat rates are, and how they are expressed.
- The difference between a generating plant's operating heat rate and its economic or conversion heat rate.
- How to correctly convert coal, oil and natural gas prices to equivalent electric power prices.
- How to correctly calculate fuel quantities. (For example, how many MMBtus per day of natural gas is required to serve a 50 MW on-peak power deal?)
- What spark spreads and dark spreads are.
- The basics of a spark spread trade, and why merchant generating assets are call options on the spot spark spread.
- What the difference is between a tolling arrangement, power purchase agreement, and heat rate deal.
- What forward and reverse "tolling deals" are, and what can go wrong.
- How heat-rate-linked power transactions can hedge a generator's cross-commodity risk.
- How heat rate deals can be combined with natural gas futures, options, and swaps to manage electricity risk and structure profitable transactions.
- How a heat-rate-linked power transaction and henry Hub natural gas futures contracts can be combined to hedge electricity price risk. (Example #1)
- How a heat-rate-linked power transaction can be used to sell solar electricity tied to natural gas prices under a multi-year power purchase agreement, and how to financially convert this natural gas determined revenue stream to a fixed sales price for project financing purposes. (Example #2)
- How a heat rate transaction and natural gas financial option can be combined to offer a customer a price cap on physical electricity, thereby virtually mimicking one of the benefits of owning a physical electric generation asset. (Example #3).
This proven online training program features the same material used in the popular PGS in-person classroom training program. Register today, and join the over 10,000 industry professionals who trust PGS with their energy training needs.
Get the best of both worlds with this blended learning approach.
- Learn at your own pace and on your own schedule as you first enjoy the internet-streamed, on-demand seminar. Speed up, slow down, or repeat sections of the presentation.
- Upon completion, join us for one of our regularly scheduled live online Q&A sessions. A calendar of live Q&A dates and times is provided in the program access instructions you will receive. You can also email your questions directly to the instructor.
You will receive immediate online access to the on-demand training presentation. The audio for the online seminar is only available through your computer or other Internet connected device. You will also receive links in your access instructions to PDFs for all the presentation materials in case you want to print or keep a copy.
The on-demand training presentations are available for a total of 30 days from the time any one of the training presentations is first accessed. After 30 days, your access to the on-demand presentations will expire. However the PDF formatted training program slides and other documents you receive are yours to keep.
President PGS Energy
John Adamiak is President and Founder of PGS Energy Training and an expert in energy derivatives and electric power markets. Mr. Adamiak is a well-known and highly effective seminar presenter who has over 20 years experience in the natural gas and electric power industries. His background includes 15 years as a seminar instructor, 9 years of energy transaction experience, and 6 years of strategic planning and venture capital activities. John's academic background includes an M.B.A. degree from Carnegie Mellon University.
$495 for a single attendee, $395 per attendee thereafter.
Special pricing is available for groups — learn more. Questions? Email customercare@pgsenergy.com or call (843) 212-4038.
Payment is required prior to training program access, by Visa, Mastercard, American Express, or corporate check. Your card is charged at the time of registration unless other arrangements are made.
Cancellations for online programs can be made before the access instructions are sent and will result in a credit. For more on PGS policies regarding administrative matters and complaint resolution, contact our offices at (843) 212-4038.