Description
unhedgedMwh = loadMwh-hedgedMwh; settlementCost = hedgedMwh*fixedPrice+unhedgedMwh*spotPrice; fullyHedgedCostGap = unhedgedMwh*(spotPrice-fixedPrice).
A generation or storage spread compares revenue with specified fuel, carbon, purchase or hedge costs. It is a local margin on a common output-energy basis, rather than complete profit or proof a dispatch or trade is feasible.
unhedgedMwh = loadMwh-hedgedMwh; settlementCost = hedgedMwh*fixedPrice+unhedgedMwh*spotPrice; fullyHedgedCostGap = unhedgedMwh*(spotPrice-fixedPrice).
When to use this tool
Use Energy Hedge Volume Shape Mismatch when checking one declared generation, storage or hedge-margin contribution.
How to use the tool and how it works
- Enter loadMwh, hedgedMwh, fixedPrice, spotPrice. Use the units and conventions below.
- Run the tool. Correct any format, range, or cross-field input error before interpreting the output.
- Read unhedgedMwh, settlementCost, fullyHedgedCostGap. Use the output convention below.
Require nonnegative loadMwh and hedgedMwh. unhedgedMwh = loadMwh-hedgedMwh; settlementCost = hedgedMwh*fixedPrice+unhedgedMwh*spotPrice; fullyHedgedCostGap = unhedgedMwh*(spotPrice-fixedPrice).1
| Input field | Meaning and units | Accepted input |
|---|---|---|
| loadMwh | Load Mwh | Required. Finite number; minimum 0. |
| hedgedMwh | Hedged Mwh | Required. Finite number; minimum 0. |
| fixedPrice | Fixed Price | Required. Finite number. |
| spotPrice | Spot Price | Required. Finite number. |
| Output field | Interpretation | Returned shape |
|---|---|---|
| unhedgedMwh | Load minus hedged volume, signed and potentially negative for an overhedge. | Required. Finite number. |
| settlementCost | Settlement Cost | Required. Finite number. |
| fullyHedgedCostGap | Fully Hedged Cost Gap | Required. Finite number. |
{
"input": {
"loadMwh": 100,
"hedgedMwh": 80,
"fixedPrice": 50,
"spotPrice": 70
},
"output": {
"unhedgedMwh": 20,
"settlementCost": 5400,
"fullyHedgedCostGap": 400
}
}Limitations and assumptions
- Prices are currency/MWh and may be negative. Overhedging yields negative unhedged volume; physical delivery, contract settlement and changing load shape are not verified.
- Inputs must satisfy both the field types and the cross-field conditions above. Invalid input causes an error; a successful false flag or documented placeholder is a different result.
- Numeric calculations use binary floating point unless exact decimal-integer arithmetic is explicitly stated. No hidden measurement tolerance or decimal rounding is added; nonfinite or out-of-contract results are rejected. Numeric signed-zero results are exported as zero.
Alternative or Complementary methods
Use complete operating costs, technical constraints and settlement terms to assess a real dispatch, hedge or investment.
References
Similar or alternative tools
- Dark Spread Emission Cost Term
fuelCost = coalPrice*fuelUnitsPerMwh; carbonCost = emissionsPerMwh*carbonPrice; cleanDarkSpread = powerPrice-fuelCost-carbonCost-variableCost.
- Carbon Cost Pass Through One Mwh
grossCarbonCost = emissionTonnesPerMwh*carbonPricePerTonne; priceIncrement = grossCarbonCost*passThroughFraction.