Heat Rate

Heat rate is the standard measure of how efficiently a thermal power plant converts fuel into electricity. It expresses the amount of fuel energy — in British thermal units (Btu) in North American practice, or kilojoules elsewhere — needed to generate one kilowatt-hour of electrical output. The lower the heat rate, the less fuel a plant burns per unit of power, and the cheaper each kilowatt-hour becomes for whoever is buying the fuel. For a miner generating power on site, heat rate is not an abstraction: it is the exchange rate between the gas contract and the electricity bill.

Heat rate and efficiency

Heat rate is simply the inverse of thermal efficiency, expressed in units the fuel market uses. One kilowatt-hour contains exactly 3,412 Btu, so a theoretically perfect plant would post a heat rate of 3,412 Btu/kWh; divide 3,412 by any real heat rate and you get the plant's efficiency. Real machines fall well short of perfect. A modern combined-cycle gas turbine running near 60% efficiency posts roughly 5,700–7,000 Btu/kWh. A simple-cycle OCGT peaker at 33–43% efficiency burns on the order of 8,000–10,000+ Btu/kWh. A good lean-burn reciprocating engine genset at 45–50% lands between them, around 6,800–7,600 Btu/kWh — one reason engines dominate behind-the-meter mining.

The miner's arithmetic

Heat rate is the bridge between fuel price and electricity cost, and the calculation fits on a napkin. Multiply the heat rate by the delivered gas price per million Btu (MMBtu) and you get the fuel component of cost per kilowatt-hour. A genset at 7,500 Btu/kWh burning $3/MMBtu gas produces power for about 2.25 cents/kWh in fuel — before capital, maintenance, and consumables. That figure feeds directly into cost per terahash and break-even analysis, and it explains a recurring trap: a plant that looks cheap on capital can quietly erode margins for years if its heat rate is high, because the penalty is paid every hour the machines hash. It also explains the appeal of flare-gas mining — when the fuel is effectively free, even a mediocre heat rate produces nearly-free electricity, and efficiency stops being the deciding variable.

Nameplate versus reality

The heat rate on the datasheet is measured at full rated load under standard conditions, and real operation rarely matches it. Heat rate worsens at partial load — often sharply for turbines, more gently for engines — so a unit run well below its rating burns more fuel per kilowatt-hour than its nameplate suggests. Ambient temperature, altitude, fuel quality, and machine wear all push the number the wrong way. When modeling a site, use the manufacturer's part-load heat-rate curve at your expected operating point, not the headline figure, and pair the metric with the plant's turndown ratio and its baseload-versus-peaking profile to estimate real-world fuel spend.

Why the concept travels well

Heat rate is ultimately the same discipline miners already apply to their ASICs: joules per terahash, but one level up the energy chain. An operation's true efficiency is the product of both conversions — fuel to electrons, electrons to hashes — and a weakness in either multiplies through. The operators who win on cost are the ones who measure both numbers at the wall instead of trusting either spec sheet.

Two conventions can trip up a first reading of engine and turbine literature. Heat rates and efficiencies may be quoted against the fuel's higher heating value (HHV) or lower heating value (LHV), which differ by roughly ten percent for natural gas — engine manufacturers often quote flattering LHV numbers while gas is billed on HHV, so mixing the two silently inflates a business case. And quoted figures assume the generator terminals, before parasitic loads like cooling fans, pumps, and gas compression that the site itself consumes. Build your model on HHV, net of parasitics, at your real operating point, and the spreadsheet will survive contact with the meter.