Description
Normalize two signed energy prices to a common supplied unit basis and return their spread.
Energy price comparisons require consistent delivered or input energy units, efficiency, calorific basis and reporting period. Dividing by efficiency increases the input needed for a delivered unit; nominal price differences alone need not represent a saving.
Normalize two signed energy prices to a common supplied unit basis and return their spread.
When to use this tool
Use Energy Price Basis Spread when checking one supplied energy-price normalization or cost contribution.
How to use the tool and how it works
- Enter firstPrice, secondPrice, suppliedFirstUnitFactor, suppliedSecondUnitFactor. Use the units and conventions below.
- Run the tool. Correct any format, range, or cross-field input error before interpreting the output.
- Read firstNormalized, secondNormalized, spread. Use the output convention below.
Require positive suppliedFirstUnitFactor and suppliedSecondUnitFactor. Normalize each price by multiplying its factor; spread = firstNormalized-secondNormalized. Both factors must convert their source prices to the same target price unit.1
| Input field | Meaning and units | Accepted input |
|---|---|---|
| firstPrice | First Price | Required. Finite number. |
| secondPrice | Second Price | Required. Finite number. |
| suppliedFirstUnitFactor | Supplied First Unit Factor | Required. Finite number; strictly above 0. |
| suppliedSecondUnitFactor | Supplied Second Unit Factor | Required. Finite number; strictly above 0. |
| Output field | Interpretation | Returned shape |
|---|---|---|
| firstNormalized | First Normalized | Required. Finite number. |
| secondNormalized | Second Normalized | Required. Finite number. |
| spread | Spread | Required. Finite number. |
{
"input": {
"firstPrice": 10,
"secondPrice": 20,
"suppliedFirstUnitFactor": 2,
"suppliedSecondUnitFactor": 0.5
},
"output": {
"firstNormalized": 20,
"secondNormalized": 10,
"spread": 10
}
}Limitations and assumptions
- Unit names, currency conversion and reference bases are not checked. A numeric spread does not imply an executable arbitrage opportunity.
- 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 the full tariff, operating profile and cost boundary when assessing real bills, investments or load-shifting decisions.
References
Similar or alternative tools
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