You are not alone if you are not familiar with what a Heat Rate is. This is a tough one to explain. But, here goes nothing.
What is a Heat Rate?
A heat rate is a measurement used in the energy industry to calculate how efficiently a generator uses heat energy. In the marketplace, heat rate is expressed in mmbtu/mwh or how many million BTUs* of heat is required to produce a megawatt (mw) of electricity. That figure tells us the Heat Rate or the efficiency of the generating facility. Types of fuel include coal, natural gas and oil to produce the majority of electricity.
(*Don’t know what a BTU is? Click here to check out our past blog that explains it.)
How does a Heat Rate fit into the wholesale electricity equation? It’s quite simple actually! Read more below.