Data compiled between January and November 2025 shows a marked increase in the profitability spreads of thermal power plants operating in the PJM Interconnection electricity market, the largest wholesale platform in the United States. The spreads known as “spark spread” for natural gas and “dark spread” for coal are financial indicators used to estimate net generation profitability after accounting for fuel costs.
Coal plants are closing the gap with gas
In 2023, coal-fired plants posted negative profitability with an average dark spread of -$14 per megawatthour (MWh) over the first eleven months of the year. In 2025, this margin rose to around $21/MWh, an increase of nearly 250% compared to the same period in 2024. This trend was observed despite a 5% rise in the average price of coal over the same period.
The spark spread for natural gas-fired plants also increased, moving from an average of $21/MWh in 2023 to $28/MWh during the first eleven months of 2025. However, the growth of the coal dark spread outpaced that of gas, narrowing the gap between the two technologies. This evolution is reshaping the competitive balance in the market.
The decisive role of wholesale electricity prices
The improvement in both indicators is attributed to higher average daily wholesale electricity prices between January and November 2025 compared to the previous year. These elevated price levels are mechanically increasing margins for thermal producers, particularly those with stable fuel supply contracts.
PJM Interconnection, which covers a large portion of the eastern United States, serves as a strategic barometer for the competitiveness of different generation sources. In this context, the narrowing spreads could prompt a reassessment of operational priorities in generation portfolios, particularly for coal assets that had been traditionally scaled back.
A closely watched market signal
The spark spread is calculated using an energy conversion rate of 7,000 British thermal units per kilowatthour (Btu/kWh) for gas, compared to 10,500 Btu/kWh for coal in the case of the dark spread. These parameters allow for standardised profitability comparisons across technologies by isolating the impact of fuel costs.
Between January and November 2025, the average spark spread stood at $28/MWh, compared to $21/MWh for the dark spread. This narrowing highlights the return of coal-fired unit competitiveness amid broadly higher electricity prices across the market.
