Automated Meter Reading (AMR)

Automatic collection of data from meters and subsequent transfer to a central database for billing and/or analysis.

APX Power UK – Now EPEX Spot

Independent power exchange offering an anonymous market place for integrated trading, clearing and notification for spot and prompt power contracts and a trading platform for cleared forwards contracts.

Apparent Power

Is the product of the current and voltage of a circuit. Due to energy stored in the load and returned to the source, or due to a non-linear load that distorts the wave shape of the current drawn from the source, the Apparent power will be greater than the Real Power.

Assistance for Areas with High Electricity Distribution Costs (AAHEDC)

A scheme to reduce costs to consumers of electricity in geographical areas where the distribution costs are very high. National Grid recover AAHEDC from consumers across the UK and pass this as a subsidy to the relevant DNO’s.

Availability Charge

See Capacity – charges generally applied on a monthly basis in terms of £ per kVA.

Availability / Agreed Capacity / Supply Capacity

See Capacity.

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Balancing Mechanism

The mechanism which allows the UK System Operator to call upon additional generation/consumption or reduce generation/consumption in order to balance the UK electricity supply network minute by minute. The mechanism operates during the hour before each trading period.

Baseload Demand

The minimum demand experienced by a generating plant over a defined period of time.

Biomass

A collective term for all plant and animal material – a variety of different forms of biomass can be used in the production of energy.

Block

Also known as Tranche. A set period or quantity of time for which energy can be purchased.

Balancing Mechanism Reporting Service (BMRS)

The service provided by the BMRA.

Balancing Mechanism Reporting Agent (BMRA)

The BSC Agent for Balancing Mechanism Reporting.

Balancing & Settlement Code (BSC)

The legal document setting out the rules for the operation and governance of the Balancing Mechanism and Imbalance Settlement. Al licensed electricity generators and suppliers must sign up to the BSC and other interested parties may also choose to do so.

Balancing & Settlement Code Company (BSCCo)

Defined and created by the Balancing and Settlement Code (BSC) in March 2001. A non-profit organisation responsible for managing the provision of the necessary central systems and services to give effect to the BSC rules and for managing the governance processes.

Balancing & Settlement Code Participant (BSCP)

Authorised or accredited participant within the BSC.

Balancing Service Use of System (BSUoS)

Charges that apply to generators and suppliers that are based on the energy that they have taken from or supplied to National Grid in every half hourly settlement period. The charges are paid to recover the costs of operating the balancing mechanism.

Buy Out Fund (RO)

These are accumulated by OFGEM during a compliance period (April to March) from payments of the buy-out price by electricity supply companies. This is redistributed to Suppliers according to their compliance with the Renewables Obligation.

Buy Out Price (RO)

This is the price per MWh charged to electricity supply companies unable to meet their obligation to present he correct quantity of Renewable Obligation Certificates.

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Cap

A supply contract between a buyer and seller, whereby the buyer is assured that they will not have to pay more than a given maximum price.

Cap and Trade Scheme

A scheme covering pollutant gas emissions, in which the quantity of pollutant is fixed and participants trade emission allowances to meet the cap at lowest cost.

Capacitance

The property of a capacitor that determines the quantity of electric energy that it can store.

Capacitor

A device consisting of two conducting surfaces separated by an insulator and having the ability of storing electric energy. Also called a Condenser.

Capacity

Supply Capacity (or Availability) is an agreed limit on the maximum demand permitted through a supply point by the DNO – measured in kVA.

Carbon Capture & Storage (CCS)

The removal of CO2 from fossil fuels either before or after combustion and its long-term storage in structures such as deep saline aquifers and depleted oil and gas reserves.

Carbon Credit

A credit or permit arising from a greenhouse gas emissions reduction scheme, such as emissions trading.

Carbon Reduction Commitment Energy Efficiency Scheme (CRC)

Mandatory UK climate change and energy saving scheme designed to improve energy efficiency in large organisations. Operated as a “cap and trade” mechanism, it provides a financial incentive to reduce energy use by putting a price on carbon emissions from energy use.

Carbon Trust

An independent, not-for-profit company set up by the Government with support from businesses to encourage and promote the development of low carbon technologies.

CCL Exempt Energy

Electricity generated from renewable sources.

Climate Change Agreements (CCA)

These allow eligible energy-intensive businesses to receive a discount from the CCL in return for meeting energy efficiency or carbon-saving targets.

Climate Change Levy (CCL)

On 1 April 2001, the Government introduced the Climate Change Levy (CCL) under the Finance Act 2000. It is a charge on non-domestic supply of electricity in the United Kingdom. This is the industrial and commercial supply of taxable commodities for lighting, heating and power by consumers in industry, commerce, agriculture, public administration and other services.

Coal Bed Methane (CBM)

Methane recovered from coal seams that are un-mined. This methane can be recovered before mining takes place or be recovered from seams that will not be mined; this is called Virgin Coal Bed Methane (VCBM)

Coal Mine Methane (CMM)

Methane recovered from working mines. It can be released as a direct result of the physical process used in coal extraction or due to the collapse of rock strata that surrounded the mined section of the coal seam.

Co-firing

This is the combustion of two or more fuel types inside the same combustion device. An example of this is the co-firing of biomass products with fossil fuels in conventional fossil-fuel power stations.

Combined Cycle Gas Turbine (CCGT)

An electricity generation technology combining steam turbines with gas turbines. A gas-fired electricity plant generates electricity producing waste heat as a by product which then drives a steam turbine to produce further electricity. This increases the generation output without increasing fuel input.

Combined Heat and Power (CHP)

A power generation plant which produces electricity and uses the waste heat generated for practical purposes such as space heating or in a commercial process.

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Dark Spread

Difference between the price of coal and the price of electricity. A positive spread indicates that the value of the power is higher that that of the coal used to generate it.

Data Aggregator / Aggregation (DA)

A party appointed by a Supplier to carry out the aggregation of metering data received from Data Collectors and to forward such aggregated data to the relevant industry parties.

Data Collector / Collection (DC)

A party appointed by a Supplier to retrieve, validate and process metering data in relation to metering equipment.

Day-Ahead Market

The market for energy for the next available working day ie purchasing of forecasted energy one working day prior to its actual consumption.

Deemed Contract

The Electricity Act 1989 (paragraph 3, Schedule 6) requires Suppliers to set out the deemed contract scheme arrangements & prices that will apply where the Supplier is registered to a given MPAN but where no formal agreed Supply Contract is in operation; the default arrangement.

Decentralised

Also referred to as distributed energy; the generation of electricity from many

Decentralised Energy

Also referred to as distributed energy; the generation of electricity from many small energy sources closer to where the electricity is used. This process reduces the amount of energy lost in transmitting electricity.

Declared Net Capacity (DNC)

Th maximum rating of a generation asset, minus any power consumed by the generator, at which it can run continuously. It is the installed capacity minus the in house load.

De-energisation

The interruption of supply so that electricity cannot flow from the network through a supply point – a reversible process ( See Disconnection )
The rate at which electric energy is used in any instant or average over a period of time. Usually expressed in kW.

Demand Side Response (DSR)

The action taken by large consumers of energy, whereby they agree to reduce their energy consumption if the supply of electricity is threatened during sustained peak demand or supply shortage. This reduces the gaps between supply and demand, protects the system and can help to avert a supply emergency.

Disconnection

The permanent removal of a meter, cabling and service from a premises.

Distribution Network Operator (DNO)

A company licensed to distribute electricity in Great Britain by Ofgem. There are fourteen licensed areas where the DNO distributes electricity from the National Transmission Grid to homes and businesses.

Distribution Use of System (DUoS)

Charges levied by the DNO’s on Suppliers for use of their local network to transport the power from the National Transmission Grid to customers’ premises.

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Elecktralink

Created in 1998 to provide an independent, secure and low cost service to transfer data between the players operating in the deregulated UK electricity industry.

Electricity Forward Agreements (EFA)

Contract for delivery of power in a future period.

Electricity Market Reform (EMR)

UK Government (2013) initiative to make sure the UK remains a leading destination for investment in low-carbon electricity.

Elexon

Administrator of the balancing and settling arrangements as laid down in the Balancing and Settlement Code (BSC).

Embedded Benefit

These are benefits paid to operators of Embedded Generation for exporting electricity within the area maintained by the local DNO – these include BSUoS, TNUoS, DUoS& AAHEDC.

Embedded Generation

Embedded Generation refers to smaller generators, including many renewable and CHP assets that are connected to the Distribution Network but not the Transmission Network. This is due to their relatively low output, geographic location and the lower costs of connection than that associated with Transmission Network connection.

EPEX Spot – Previously APX Power UK

Independent power exchange offering an anonymous market place for integrated trading, clearing and notification for spot and prompt power contracts and a trading platform for cleared forwards contracts.

Extra High Voltage (EHV)

Electricity distribution assets operating at voltages betweentween 22 – 132kV. Voltages greater than 132kV are generally electricity transmission assets.

Energy from Waste (EfW)

EfW refers to the energy produced from the combustion of waste under controlled conditions. This generates electricity and/or heat and further reduces the volume and hazardousness of the waste.

Energy Saving Trust (EST)

An independent not-for-profit organisation, set up and largely funded by the Government to manage a number of programmes to improve energy efficiency, particularly in the domestic sector.

Estimated Annual Consumption (EAC)

An estimated rate of consumption, nominally expressed in kWh/Year, that is used in the settlement until an actual meter advance is calculated; generally applied to NHH metered supply points.

European Union Emissions Trading Scheme (EU ETS)

The largest multi-country, multi-sector Greenhouse Gas Emission Trading System worldwide. The scheme is based on Directive 2003/87/EC, which entered into force on 25 October 2003.

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Feed-In Tariff (FIT)

Introduced in 2010 to incentivise new renewable generation. Under the scheme energy Suppliers make regular payments to generators such as communities, landowners and householders who produce their own electricity from renewable or low carbon sources.

Firm Power

Power or power-producing capacity. Intended to be available at all times during the period covered by a guaranteed commitment to deliver, even under adverse conditions.

Fixed Costs

Production or transmission related expense which must be paid regardless of whether the energy is produced or sold. Fixed costs can include capital costs, labour and maintenance charges, taxes and demand charges, among others.

Fixed Price

A price component that cannot or will not be changed for the duration of the contract, with the exception of VAT and regulatory charges.

Fossil Fuels

These are naturally-occurring fuels (e.g. coal, oil and natural gas). They are hydrocarbon deposits that have formed from the remains of living matter from a previous geologic time period.

Fossil Fuel Levy

A levy paid by Suppliers of electricity from non-renewable energy sources in the United Kingdom. Since 2002 the levy has been set out 0 % throughout the UK.

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Gemserv

Organisation that provide a range of services to Government departments, regulators, trade associations and market participants. Originally established in 1998 to provide governance services to the competitive retail electricity market, Gemserv now provides services including consultancy, market design, testing, certification, training and back-office support services.

Gigawatt-hour (GWh)

One thousand Megawatt-hours (MWh) or one million kilowatt-hours (kWh)

Gigawatt (GW)

One thousand Megawatts (MW) or one million kilowatts (kW).

Green Deal

Is a UK Government initiative (2013) that is designed to help business and home owners to employ more green technologies in their properties. The idea is simple; install new green technology into a property with no up front costs, then pay back the costs through the energy bill over a period of time.

Grid Code

At privatisation and as required by the transmission licence, National Grid implemented the Grid Code, which is designed to permit the development, maintenance and operation of an efficient, co-ordinated and economical system for the transmission of electricity, to facilitate competition in the generation and supply of electricity and to promote the security and efficiency of the power system as a whole. National Grid and users of its transmission system are required to comply with the Grid Code.

Grid Trade Master Agreement (GTMA)

An agreement for trading electricity within the UK. Although electricity is a non-tangible asset, these agreements are used in order to trade guarantees to provide power for a certain length of time.

Grid Supply Point (GSP)

The point of connection between the transmission system and the distribution system.

Half Hourly electricity metering (HH)

Metering equipment that records the electricity consumption of a supply point during each half hour throughout every day; Since April 1998, HH meters have been mandatory for all electricity customers with a maximum power demand (peak load) greater than 100kW for three months in the previous 12 months.

Hedging

A trading strategy designed to minimise exposure to an unwanted price risk.

Hedging Agreement

An agreement that mitigates or limits risk, ie price risk.

Heren

Energy industry trade publication.

Heren Market Index

A range of indices that energy prices can be tracked against.

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Imbalance

The difference between the Contracted Position and the Actual Position volumes in a given Settlement Period.

Independent Power Producer (IPP)

Organisations with generating capacity that are not associated with traditional electricity generation companies.

Indexed

Linked to a specific index used to track market movement.

Indices

Statistical measures of change in the markets.

Interconnector

This is a physical link into and out of a national electricity infrastructure; a cable connection allowing electricity to flow between two countries or markets. There are interconnectors between the north of England and Scotland and from the south of England to France, Belgium and Holland.

Interruptible Load

See Demand Side Response & Load Management.

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Kilovolt-ampere (kVA)

A measurement of the size of the electricity supply capacity.

Kilovolt-ampere reactive hour (kVArh)

A unit of measurement of reactive power.

Kilowatt (kW)

One thousand Watts

Kilowatt-hours (kWh)

One thousand Watt-hours; the accepted basic unit of electricity consumption.

Kyoto Agreement

An agreement made in Kyoto, Japan in December 1997, under which industrialised countries, including Japan and the European Union states, promised to adopt specific goals and timelines for nationwide reductions of greenhouse gas emissions between 2008 and 2012.

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Levy Exemption Certificate (LEC)

LECs are evidence of CCL exempt electricity supplies generated from qualifying renewable sources.

Licensing

Underpins the regulatory system, giving Ofgem powers to regulate the supply industry.

Line Loss Factor (LLF)

Used to scale energy consumed/ generated in order to account for losses on the UK’s Distribution Networks.

Liquidity

A measure of the number of deals being transacted in a market, and the ease at which a trader can buy or sell.

Load Curve

A representation of power requirements over time. When plotted on a graph, time is usually depicted as the horizontal axis and electrical load as the vertical axis.

Load Factor

Ratio of average energy demand (load) to maximum demand (peak load) during a specific period. Usually stated as a percentage, or number of hours used.

Load Management

Also known as demand side response (DSR), is the process of balancing the supply of electricity on the national or local network with the electrical load by adjusting or controlling the load rather than the generation output.

Load Profile

A number of different forms of data that represent the pattern of electricity usage.

Lock-in

Commitment to purchase energy for a particular contract term at a particular price.

Long Position

A position where a party is holding more of a commodity than they need to fulfil their demand for the period in question.

Low Carbon Building Programme (LCBP)

The Low Carbon Building Programme provides grants for microgeneration technologies for householders, community organisations, schools, the public sector and businesses.

Low Voltage (LV)

Electricity transportation assets operating at voltages between 1kv – 11kv

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Market price

The price that parties are able to contract at in the marketplace at a point in time.

Market risk

Exposure to the uncertain market price of an asset.

Master Registration Agreement (MRA)

Is the multi-party agreement between all licensed electricity Distribution Businesses and Suppliers. It sets out terms for the provision of Metering Point Administration Services (MPAS Registrations), and procedures in relation to the Change of Supplier to any premises/metering point.

Maximum Demand (MD)

The measure of the highest peak of electricity flow through a supply point during a half-hour period over a defined period ( usually month of year ); generally expressed in kW or MW.

Measurement Class

Determines whether an electricity meter records consumption Half Hourly (HH) or Non Half Hourly (NHH).

Megawatt (MW)

One thousand kilowatts (kW).

Megawatt-hour (MWh)

One thousand kilowatt-hours (kWh).

Meter

An electricity meter or energy meter is a device that measures the amount of electric energy consumed by a residence, business, or an electrically powered device.

Meter Operator (MOP)

This is the authority responsible for maintaining and installing electricity meters. Data from these installed meters is then collected from an assigned Data Collector and used to bill customers.

Meter Point Administration Number (MPAN)

Is a unique 21- digit reference which identifies individual supply points in Great Britain. This number can be found on every bill and remains the same even if the meter at the property is changed.

Micro Wind Turbine

Driven by wind passing over the turbine blades to drive a small electrical generator. Turbines can be installed on the top of a roof, or on the ground.

Microgeneration

The decentralised production of low, zero or renewable energy at a small scale e.g. domestic solar panels and micro wind turbines.

Microgeneration Certification Scheme (MCS)

A process of accreditation to be undertaken for generating units with an installed capacity of 50KW or less.

MRA

See Master Registration Agreement.

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N2EX

A UK physical power market solution, including technical trading and clearing, a regulatory framework, clearing procedures and Elexon approvals of clearinghouse requirements that was launched 12 January 2010. N2EX is not a legal entity, but the name of the market which NASDAQ OMX Commodities and Nord Pool Spot operate in the UK.

National Grid Electricity Transmission plc (NGET)

Owns, operates and develops the high voltage electricity transmission network in England and Wales.

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Off Grid

A generation unit which is connected to a private wire network and not the National Transmission or DNO Network.

Offer

The price a Supplier is willing to sell at.

Office of Gas and Electricity Markets (Ofgem)

The Office of Gas and Electricity Markets; the industry regulator.

Over-the-Counter trading (OTC)

OTC (or off-exchange ) trading is done directly between two parties, without any supervision by an exchange. It is contrasted with exchange trading, which occurs via these facilities.

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Peak Load

Electricity consumed or delivered from 7am to 7pm, Monday to Friday only.

Power Factor

The power factor of an AC electrical power system is defined as the ratio of the real power flowing to the load, to the apparent power in the circuit,and is a dimensionless number between -1 and 1. A negative power factor occurs when the device which is normally the load, generates power which then flows back towards the device which is normally considered the generator

Power Purchase Agreement (PPA)

This sets out the rights and obligations of the buyer and seller over a time horizon and the allocation of risks (credit, delivery, insurance, volume, pricing structure, balancing, default) and benefits (ROCs, LECs, REGOs, embedded costs etc.) between the buyer and seller over the lifetime of the power contract.

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Reactive Charges

Charges applied to a consumers invoice in those cases where the DNO enforces a penalty for excessive Reactive Power use.

Reactive Power

The power that continually bounces back and forth between the source and the load is known as reactive power. Reactive power represents the energy that is first stored and then released in the magnetic field of an inductor, or in the electric field of a capacitor

Real Power

Real power is the capacity of an electricial circuit for performing work in a particular time.

Renewable Energy

Energy obtained from sources that are essentially inexhaustible. Renewable sources of energy include geothermal, hydro, photovoltaic, solar thermal energy, biomass and wind.

Renewable Energy Guarantee of Origin (REGO)

A certificate which verifies that electricity has been produced from renewable sources. One REGO represents one megawatt-hour of electricity.

Renewables Obligation (RO)

A requirement on licensed electricity Suppliers in the UK to source a rising percentage of their annual sales from eligible renewable sources.

Renewables Obligation Certificate (ROC)

Typically one ROC is issued to the operator of an accredited generating station for each MWh of eligible electrical output generated from eligible renewable resources. Certain types of generation receive a higher ROC to MWh ratio. ROCs are used exclusively to discharge the UK suppliers’ Renewables Obligation.

Risk premium

A premium above the expected value of the asset, to be paid in return for insulation from market risk.

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Season

A trading period of six months or two Quarters; Summer = April to September, or Quarters 2 & 3. Winter = October to March, or Quarters 1 & 4.

Seasonal Time of Day Tariff (STOD)

This is a unit based supply offer where electricity is supplied at different unit rates according to the time of day the power is taken by the customer. Typically they have different tariffs for Day Night, Summer Day and Winter Day and Winter Peak supply times, generally between 4.00 p.m. and 7.00 p.m. In addition to this they often have an Evening supply period. STODs can have between 4 and 56 different unit rates in them.

Settlement

This is process that ‘settles’ the distribution of electricity to establish where and to whom the generated load has been distributed.

Settlement Period

A period of 30 minutes beginning on the hour or the half-hour. A day is split into 48 separate settlement periods with period 1 being 00:00 to 00:30 and period 2 being 00:30 to 01:00 etc.

Short position

A position where a party is holding less of a commodity than is needed to meet their current/future demand.

Smart Grid

A modernized electrical grid that uses information and communications technology to gather and act on information, such as information about the behaviors of Suppliers and consumers, in an automated fashion to improve the efficiency, reliability, economics, and sustainability of the production and distribution of electricity.

Smart meters

Any meter which allows for the identification of consumption in more detail than a conventional meter. Smart meters will generally also include a means of communicating information to a central data collection site for energy management and/or billing purposes.

Solar Photovoltaic (PV)

Converts sunlight into electricity for use. It normally comprises of a number of solar panels connected to an inverter which is wired into a premises’ electricity supply. Sunlight hitting the solar cells causes a flow of electricity.

Solar Thermal Energy

Use of energy from the sun to heat water by using a number of solar panels connected to a hot water cylinder.

Spark Spread

Difference between the price of gas and the price of electricity. A positive spread indicates that the value of the power is higher that that of the gas used to generate it.

Supply point

Intake feeding electricity from the DNO distribution network to the consumers premises.

System Buy Price (SBP)

The price at which consumed uncontracted electricity or ungenerated contracted electricity must be purchased from the UK electrical power system. The price is calculated separately for each half hourly period. SBP is published on the web at http://www.bmreports.com

System Sell Price (SSP)

The price at which unconsumed contracted electricity or generated uncontracted electricity must be purchased by the UK electrical power system. The price is calculated separately for each half hourly period. SSP is published on the web at http://www.bmreports.com

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Terawatt (TW)

One thousand Gigawatts (GW) or one billion kilowatts (kW).

Terawatt-hour (TWh)

One thousand Gigawatt-hours (GWh) or one billion kilowatt-hours (kWh)

Tranche

Set period or quantity of time for which energy can be purchased.

Transmission Network

The electricity system which transports electricity from grid-connected power stations to local distribution networks.

Transmission Network Use of System (TNUoS) charges

Charge reflecting the costs incurred by the Transmission Owner (TO) for installing, maintaining and operating the transmission system. The TNUoS charge is divided into a 27:73 ratio between generators that export on to the system and suppliers that import from it.

Triad Period

The Triad Periods are the three half-hours in each winter season (November to February) that have the highest demand peaks on the electricity network. The three peaks have to be separated by ten days. The peaks tend to be in the half hours between 1630 & 18.00.

Triad Warning Service

A service provided which seeks to forecast when the Triads are likely to happen, which allows a consumer to modify its consumption and minmise the associated TNUoS Charges.

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Unfix

To sell back energy from previous purchases at the current market price.

Unmetered Supply (UMS)

Unmetered Supplies refers to any electronic equipment that draws a current and is connected to the Distribution Network without a meter recording its energy consumption. These can include traffic signals, street lights, CCTV cameras, roadside telecoms cabinets and parking meters.

Unmetered Supply Certificate

Issued by a DNO to a customer that states the MPAN’s and a reference/description of the electronic equipment which has been authorised to receive Unmetered Supplies.

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Watt

The electrical unit of power. The rate of energy transfer equivalent to one ampere flowing under a pressure of one volt at unity power factor.

Watt-hour (Wh)

An electrical energy unit of measure equal to one watt of power supplied to, or taken from, an electric circuit steadily for one hour.

Wholesale Price

The price paid on the open market for electricity, exclusive of all transportation, distribution costs, supplier margins, taxes and levies.

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