This chapter presents the bivariate geometric Brownian motion model for the joint price dynamics of two energy commodities. It extends the Margrabe formula to price a call spread option with zero strike based on these dynamics. Different examples relevant for spread options in energy markets are presented. Hedging parameters for this option are derived, including the deltas and the gammas. The case of non zero strike spread options is analysed, where the chapter introduces Kirk's approximation. The Bjerksund-Stensland approximation formula is discussed. The chapter also introduces the approximation based on Taylor expansion of the option price as a function of the strike. It analyses the price of spread options in energy markets. In energy markets, like the markets for electricity in northern Europe, say, there is a seasonal pattern in prices. In the cold season, prices are generally higher than in the summer, due to demand for heating.