For December 2005 with power prices, at £52.95 and gas prices at 67.5p therm this produces a spark spread at £6.07, not a bad margin for a power station. However, if you take into account the cost of emissions this spread would reduce to -0.21p. The station would therefore run at a loss. If pure economics were at force, the station would sell the gas, and sell the emissions, and turn off. This would in turn see gas prices fall emissions prices fall and power prices rise.

In reality stations are aware that the market should and probably will correct itself, and at day ahead the spark spread is trading at £13.70 on the dirty spark or £7.43 on the clean spark. So the stations are running positions to the prompt. In reality there is a huge risk in trading this because of liquidity, if you do sell your gas you know at prompt you will have to buy it back, and this is where the market is at its most volatile and illiquid, you also have a very small unwind time, and so the trader is trying to pre-empt a move with large volume on his or her book. As a result the trader will almost certainly do an internal paper trade, closing his station going short power and long gas, he will then, hold that position until prompt and unwind it at a profit. Nothing has physically changed, but internally he has locked in a profit on his book. This only works if he is able to do both legs of the spread. The market itself does not change because no one is physically effecting the price.