FACTORS OF THE SPARK-SPREAD IN THE NETHERLANDS

ABSTRACT This research paper is about the predictability of the spark-spread. The purpose of the paper is to find indicators of the spark-spread in order to get more insight in the movement of the spark-spread. The spark-spread is first examined from a time-series perspective resulting that the spark-spread is not different from a random walk. Secondly, the spark-spread is being tested with a fundamental model to derive different factors that might influence the spark-spread. Various factors are tested for a possible influence on the spark-spread, but only the oil-price and the emission rights futures have a significant influence on the movement of the spark-spread.