Tolling agreement & spark spread valuation
A toll is a strip of heat-rate options, not an annuity. We value tolling agreements and gas-fired generation by simulating the dispatch decision — so you see the spark-spread strip value and the operating optionality separately, with every constraint and assumption disclosed.
What we value
Spark-spread valuation
Value the spread between power and fuel with heat-rate and variable-cost modeling against hub power and gas forward curves — the strip value and the dispatch optionality, separated and explained.
Tolling agreements, either side
Value a toll from the offtaker’s or the owner’s seat: capacity payments against modeled dispatch value, with start costs, minimum run times, and ramp constraints priced rather than assumed away.
Heat-rate call options
Treat the plant as a strip of spark-spread options. Optionality is valued by simulating the run/no-run decision across thousands of joint power and gas paths, not collapsed into an average.
Gas-fired generation assets
Acquisition and portfolio valuation for CCGT and peaker capacity — dispatch-aware value for owners, lenders, and investment committees, with every assumption disclosed.
Value decomposed, not averaged
A single “effective heat rate” hides the option. We report where the value comes from.
Strip value
The spark spread locked against the forward curves today — the floor, and the part that hedges cleanly on listed markets.
Dispatch optionality
The value of choosing when to run: captured by simulating dispatch across thousands of power and gas scenarios with the plant’s real operating constraints.
Constraint drag
What start costs, minimum load, ramp limits, and outages actually subtract — modeled explicitly instead of buried in an effective heat rate.
How an engagement works
Scoped, fixed-deliverable, and typically one to two weeks end to end
Scope
Define the asset or toll, the decision it supports (acquisition, offtake, hedge, budget), and the deliverable — typically one to two weeks end to end.
Calibrate
Model the plant as contracted — heat-rate curve, start costs, ramp and minimum-run constraints — and calibrate to listed power and gas forwards, implied vol, and basis to the pricing hub.
Simulate & value
Thousands of joint power-gas price paths value the dispatch flexibility, cross-checked against simpler spread-option methods for sanity.
Deliver
A valuation report with disclosed assumptions, a dispatch and hedging playbook, and a live walkthrough with your team.
Part of Valor Asset Management — valuation for gas storage, pipeline transport, and power generation. Storage owner? See gas storage valuation software.
Common questions
How do you value a tolling agreement?
A toll is a strip of spark-spread (heat-rate) options: the right, but not the obligation, to convert gas into power at a contracted heat rate. Valor values it by simulating the run/no-run decision across thousands of joint power and gas price paths with the plant’s real operating constraints — start costs, minimum run times, ramp limits — then separates the strip value that hedges on forwards from the dispatch optionality that does not.
What is spark spread valuation?
Spark spread is the margin between power revenue and fuel cost at a given heat rate. Spark-spread valuation prices both the strip (the spread locked against forward curves) and the option value of dispatching only when the spread is positive. Averaging the spread understates the asset; optionality-aware simulation captures the upside of responding to prices.
How is this different from a standard DCF on a power plant?
A DCF on expected cash flows misses the value of flexibility — running when spark spreads blow out, sitting when they collapse. Physical generation is an option, not an annuity. Optionality-aware methods price the dispatch decision itself, and they price the constraints (starts, ramps, minimum load) that a DCF hides inside an assumed capacity factor.
Is this a software subscription or an engagement?
Tolling and generation valuation is a scoped, fixed-deliverable engagement run on our simulation and optimization engines. Many clients start with one valuation and keep a live dashboard afterward. See Power & Energy Asset Valuation for the broader asset scope.
Put a number on your toll
Bring the plant or contract parameters and the commercial question — leave with a defensible, decomposed valuation.