Glossary

# A B C D E F G H I J K L M N O P Q R S T U V W X Y Z

A

  • Absence Detection A type of automatic lighting control system that uses sensors to automatically turn the lights off a set period after a person has left the room. To turn the lights on a manual switch must be used.
  • Area Boards Are privatisations predecessors of Regional Electricity Companies (REC's) who marketed the electricity to customers in the UK regions.
  • Availability Charge A charge for the amount of electricity held in reserve levied monthly in £ per KVA.

B

  • Backwardation When the price of nearer (typically prompt or spot) crude underlying commodity or instrument trades at a premium to the same commodity or instrument traded further forward. Commonly referred to as an inverse market.
  • Barrel A unit of measurement commonly used for Crude Oil equal to approximately 159 litres.
  • Baseload The minimum amount of electric power delivered or required over a given period of time at a steady rate.
  • Baseload Capacity The generating equipment normally operated to serve loads on an around-the-clock basis.
  • BBL The BBL Pipeline is a natural gas interconnector between the Netherlands and the United Kingdom.
  • Bearish Characterised by or associated with falling share prices.
  • Benchmark Crude A crude oil whose price is used as a reference against which other crudes are priced.
  • BER / TER Building Emission Rate (BER) and Target Emission Rate (TER) are measures that are used within the Part L regulations to assess whether a building’s predicted CO2 emissions are compliant. To be compliant the BER must be less than the TER.
  • Bid/Ask The bid is the price level at which buyers are willing to buy and the ask is the price level at which sellers are willing to sell. The thinner the spread the higher the liquidity.
  • BREEAM Building Research Establishment Energy Assessment Methodology (BREEAM) is a voluntary scheme aimed at scoring a building’s sustainability credentials.
  • Brent Crude Brent Crude is a major trading classification of sweet light crude oil that serves as a major benchmark price for purchases of oil worldwide.
  • British Thermal Unit A standard unit of measurement used to denote the amount of heat energy in fuels. A BTU is the amount of heat required to increase the temperature of a pint of water (which weighs exactly 16 ounces) by one degree Fahrenheit. Since BTUs are measurements of energy consumption, they can be converted directly to kilowatt-hours (3412 BTUs = 1 kWh) or joules (1 BTU = 1,055.06 joules).
  • Bullish Characterised by or associated with rising share prices.
  • Buyer's Market A market situation in which there is an abundance of goods available. The buyers can afford to be selective and may be able to buy at less than the price that previously prevailed.

C

  • Cap A supply contract between a buyer and seller, whereby the buyer is assured that he or she will not have to pay more than a given maximum price.
  • Capacity The maximum amount of power, normally expressed in megawatts, that a given system or subsystem can carry or produce at a particular moment and is typically used to represent the real production capability rating of a generation or transmission system.
  • Capacity Charge An additional billed amount that covers the difference between the power a customer expects to have available and the energy that the customer actually uses.
  • CCL The Climate Change Levy (CCL) is a tax on UK business energy use, charged at the time of supply. Energy use refers to electricity, gas, liquid petroleum gas and solid fuel.
  • CHP Combined Heat and Power (CHP) units burn gas (or other fuels, such as biomass) in order to simultaneously generate both heat and low cost and low CO2 electricity. When designed and operated correctly they can reduce a building.
  • CIBSE Chartered Institute of Building Services Engineers (CIBSE) is a British institute that sets standards and aims to delivery high performance, fit for purpose buildings. CIBSE is also able to award qualifications and accreditation to people able to deliver compliance with various Government schemes and regulations.
  • Combined Cycle Power Plants Twin-stage power plants that deliver 50-60% higher fuel efficiency. In the first stage, gas is heated, cleaned and used to run a gas turbine that produces electricity. In the second stage, the waste heat from the gas turbine, from gas cleaning and from the gasification processes are used to raise the pressure of steam, which is in turn used for generation of additional power. By operating a combination of both these stages, a combined cycle power plant is able to maximize the efficiency of the fuel used.
  • Comfort Cooling Mechanical cooling systems, typically using the refrigeration cycle to cool a room or building. Comfort cooling differs from Air Conditioning in that it only controls temperature and does not also control humidity.
  • Consumption The amount of fuel used for gross generation, providing standby service, startup and/or flame stabilisation.
  • Contango Description for an energy market where the anticipated value of the spot price in the future is higher than the current spot price. When a market is in contango, market participants expect that the spot price will go up. The reverse situation is described as backwardation.
  • Council of European Energy Regulators The CEER is the organisation in which independent national regulators of electricity and gas in Europe voluntarily cooperate. The CEER is a preparatory body for the work of the European Regulators Group for Electricity and Gas (ERGEG). The CEER is a not-for-profit association under Belgian law.
  • Crude Oil A full-ranging hydrocarbon mixture produced from a reservoir after any associated gas has been removed. Among the most commonly traded crudes are the North Sea

D

  • Day-ahead Market The market for energy for the following day, or more specifically, the market for energy 24 hours in advance of a given time in any day.
  • Demand Energy requirements for a given customer or area.
  • Display Energy Certificate (DEC) An official document that states the building's energy consumption over the previous 12 months and rates its efficiency. All public buildings are required to have DEC’s on display within their entrance areas.
  • Dynamic Simulation Modelling (DSM) Advanced software that can model a building and make detailed predictions of a building’s energy consumption, daylight levels, internal temperature, humidity, CO2 levels, air flow patterns, plant loads etc.

E

  • EEX The EEX is located in Germany and offers spot and derivatives trading regarding power, natural gas, emission rights and coal. Settlement of the transactions is ensured by an independent clearing house – ECC AG, an EEX subsidiary.
  • Emission Reduction Unit ERU refers to the reduction of greenhouse gases, particularly under Joint Implementation, where it represents one tonne of CO2 equivalent reduced.
  • Emissions Trading Emissions trading is a market-based approach in order to achieve climate protection goals. The sale of emission allowances to a higher price than an emission reduction action would cost, or the purchase of emission allowances in case of higher costs of emission reduction actions, provides an incentive for companies to engage in emission trading. Due to the limited amount of allocated emission allowances evolves a market in which also companies without emission reduction liabilities take part (cap and trade system).
  • Energy Assessor An accredited person who has the necessary qualifications and experience to advise on a building.
  • Energy Charge That portion of the charge for electric service based on the electric energy (kWh) consumed or billed.
  • Energy Performance Certificate (EPC) The Energy Performance Certificate is a legal requirement that all buildings must have at the point of construction or are being sold or leased. They give a measure of energy efficiency the building could be if it were operated in a standard manner.
  • ESOS Energy Saving Opportunities Scheme. A compulsory Government scheme that requires large organisations to audit their energy consumption, identifying potential energy savings that could be made and reduce the organisation’s energy costs.
  • European Union Emission Trading Scheme The European Union Emission Trading Scheme (EU ETS) is the largest multinational, greenhouse gas emissions trading scheme in the world and was created in conjunction with the Kyoto Protocol. It commenced operation in January 2005 with all 25 (now 27) member states of the European Union participating in it. It contains the world's only mandatory carbon trading program. The program caps the amount of carbon dioxide that can be emitted from large installations, such as power plants and carbon-intensive factories, and covers almost half of the EU’s carbon dioxide emissions.

F

  • Fan Coil Unit (FCU) A box containing fans, filters, heating and often cooling systems that control the temperature of a room. They require hot water to be piped them from a central heating system, along with chilled water if they are to also provide cooling.
  • Financial Risk Monetary hazard associated with a given investment or business activity.
  • Fixed Cost A production- or transmission-related expense that 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 that cannot or will not be changed.
  • Flat Rate A flat rate for each kilowatt-hour of energy consumed, not a fixed price for an unlimited quantity of energy.
  • Flexible Rate An economic incentive rate designed to allow a utility to negotiate discounted costs with industrial or large commercial customers.
  • Forward A method used for trading commodities that will be delivered to the buyer at a specified time in the future.

G

  • Generation Mix The diversity of generating units used to produce electricity.
  • Giawatthour (GWh) One billion watthours.
  • Gigawatt (GW) One billion watts.
  • Green Power Any type of energy that is considered to have a lower environmental impact than commercially-produced energy.
  • Grid The layout of an electrical distribution system.
  • Gross Electricity Generation The total amount of electric energy produced by the generating station or stations, measured at the generator terminals.

H

  • Heat Network Regulations Regulations that require end-users of district or communal heating, hot water and cooling networks to be sub-metered and provided with regular information on their consumption.
  • Heating Degree Day (HDD) A measure of the deviation of daytime temperature from a predefined standard.
  • Heavy Oil The fuel oils remaining after the lighter oils have been distilled off during the refining process. Except for start-up and flame stabilization, virtually all petroleum used in steam plants is heavy oil.
  • Historical Volatility The annualised standard deviation of percentage changes in futures prices over a specific period. It is an indication of past volatility in the marketplace.

I

  • IUK (Interconnector UK) The Interconnector is a natural gas pipeline between the United Kingdom and continental Europe.

K

  • Kilowatt (kW) One thousand watts.
  • Kilowatt-hour A quantitative measure of electric current flow equivalent to one thousand watts being used continuously for a period on one hour; the unit most commonly used to measure electrical energy, as opposed to kilowatt, which is simply a measure of available power.

L

  • Langeled The Langeled pipeline is an underwater pipeline transporting Norwegian natural gas to the United Kingdom.
  • Light Oil Lighter fuel oils distilled off during the refining process. Virtually all petroleum used in internal combustion and gas turbine engines is light oil.
  • Lighting Efficacy A measure of the inherent efficiency of a light fitting and/or lamp.
  • Liquidation The closing out of futures and options positions.
  • LNG (Liquefied Natural Gas) Natural gas (mainly methane) that has been liquefied for ease of storage and transportation. The gas is liquefied either by reducing the temperature or by increasing pressure.
  • Load The amount of power delivered (or deliverable) along the entire circuit or between specific points on the system.
  • Low Carbon Consultant (LCC) An accredited qualification for people who specialise in low energy design and building operation.

M

  • Marked-to-market To calculate the value of a financial instrument (or portfolio of such instruments) at current market rates or prices of the underlying. Marking-to-market on a daily (or more frequent) basis is often recommended in risk management guidelines.
  • Mechanical Extract Ventilation systems that pull air from a room or building without putting fresh air back in. Typically, this fresh “make up” air is delivered naturally through general air leakage or trickle ventilators.
  • Mechanical Ventilation Ventilation systems that use fans and ducts to deliver filtered fresh air to buildings. The air is not cooled so can never be lower that external temperature but is typically heated on cold days so as not to create cold draughts.
  • Megawatt (MW) One million watts.
  • Megawatthour (MWh) One million watt-hours.
  • Monte Carlo Simulation A method of pricing derivatives by simulating the evolution of the underlying variable (or variables) many times over. The average outcome of the simulation is an approximation of the derivative
  • Moving Average The average of commodity prices constructed for a period as short as a few days or as long as several years, which shows trends for the latest interval.
  • MVHR Mechanical Ventilation with Heat Recovery (MVHR) are mechanical ventilation systems that also include heat recovery devices that remove useful heat from stale air being expelled from the building and use it to heat the supply air. The heat recovery device reduces the building’s heating load.

N

  • Natural Gas A mixture of several combustible gases, which is found with most petroleum (oil) and tar deposits and some coal seams. Natural gas consists primarily of methane, but it can also include varying proportions of propane, butane, ethane and other combustible gases.
  • Natural Ventilation Ventilation systems that rely on opening windows, louvres or trickle ventilators to provide fresh air into buildings.
  • NBP (National Balancing Point) The National Balancing Point is a virtual trading location for the sale and purchase and exchange of UK natural gas.
  • Net Electricity Generation Gross generation less electricity consumed at the generating plant for station use. Electricity required for pumping at pumped-storage plants is regarded as plant use and is deducted from gross generation.
  • Nomination The notification to put into effect a contract or part of a contract, eg, a gas flow nomination from a shipper to advise the pipeline owner of the amount of gas it wishes to transport or hold in storage on a given day.

O

  • Occupancy Detection A type of automatic lighting control system that uses sensors to automatically turn the lights on when a person is detected and then automatically turn them back off a set period after the person has left the room.
  • Off-peak Times of relatively low energy demand, typically nights and weekends.
  • On-peak Refers to hours of the business day when demand is at its peak. In the US physical market, on-peak definitions vary by North American Electric Reliability Council region.
  • Organisation of the Petroleum Exporting Countries (OPEC) OPEC members are Algeria, Indonesia, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, Venezuela, and UAE. OPEC member states have two regular meetings a year, but may call further meetings if crude oil prices are low. At these meetings they may review both individual and group production quotas. Although not the dominant force it was in the late 1970s, because of the increase in production by non-OPEC countries, OPEC continues to control marginal supply in a world oversupplied with crude oil.
  • Outage Any interruption of current flow in a transmission or distribution system. Can occur in transmission systems without affecting end-use customers. Energy grids are designed to allow energy to be routed around areas affected by outages to ensure uninterrupted service to end-use customers.

P

  • Part L The section of the Building Regulations that deal with Conservation of Fuel and Power. It sets minimum efficiency standards, insulation levels, air leakage, etc. and applies limits to the amount of solar gain and carbon dioxide (CO2) emissions that a building can produce.
  • Passivhaus A building standard that uses extreme levels of insulation and air tightness and energy efficiency to deliver truly low energy buildings with typically excellent internal comfort conditions and almost non-existent heating requirements.
  • Peak Demand The maximum load during a specified period of time.

R

  • Reactive Power Reactive Power (kVArh) is the differene between working power and the total power consumed.
  • Refinery A plant where crude oil is separated into various components such as usable products or feedstocks.

S

  • SBEM Simplified Building Energy Model (SBEM) is a calculation methodology and a tool that uses a simplified computer model of a building to estimate its energy consumption and CO2 emissions if it were to be operated in a standard manner. Its only use is to demonstrate Part L compliance and create EPC’s and it should never be used to predict a building’s real energy consumption.
  • Seller's Market Simplified Building Energy Model (SBEM) is a calculation methodology and a tool that uses a simplified computer model of a building to estimate its energy consumption and CO2 emissions if it were to be operated in a standard manner. Its only use is to demonstrate Part L compliance and create EPC’s and it should never be used to predict a building’s real energy consumption.
  • Settlement Price The price established by the Exchange settlement committee at the close of each trading session as the official price to be used by the clearinghouse in determining net gains or losses, margin requirements, and the next day’s price limits. The term ‘settlement price’ is often used as an approximate equivalent to the term ‘closing price’. The close in futures trading refers to a brief period at the end of the day, during which transactions frequently take place quickly and at a range of prices immediately before the bell. Therefore, there frequently is no one closing price, but a range of prices. The settlement price is derived by calculating the weighted average of prices during that period.
  • Sideways Trading sideways is when the stock market is flat, not setting any direction.
  • Specific Fan Power (SFP) A measure of the efficiency of a fan or ventilation system, effectively telling you how much electricity is consumed for the amount of air that is moved.
  • Spot-market The spot market is a real-time commodity market for instant sale and delivery of energy. Spot markets exist for natural gas, where they’re operated on a time scale of days to weeks, and for electricity, where the time scale can be as small as a few minutes.
  • Storage Capacity The amount of gas that can be stored to cover peak demand.

T

  • Therm A measurement of heat equivalent to 100,000 BTU or 29.3001 kWh.
  • Thermal Store Usually a large tank of water that is used to smooth out fluctuations in a building’s heating or cooling demands to allow central plant items to operate more effectively.
  • Trickle Ventilators Small opening sections, usually installed above windows that let uncontrolled small amounts of external air into the building in order to satisfy background fresh air requirements for human health.
  • TTF (Title Transfer Facility) The Title Transfer Facility, more commonly known as TTF, is a virtual trading point for natural gas in the Netherlands.

U

  • UKCS The UK Continental Shelf is the region of waters surrounding the United Kingdom, in which the country claims mineral rights.

V

  • Value at Risk (VaR) The worst loss expected to be suffered over a given period of time with a given probability. The time period is known as the holding period, and the probability is known as the confidence interval.
  • Volatility A measure of the variability of a market factor, most often the price of the underlying instrument.
  • VRF / VRV Variable Refrigerant Volume / Flow cooling system. A type of heating and comfort cooling system, based on the refrigeration cycle that is inherently efficient and includes a form of heat recovery that allows them to use heat removed from warmer areas of a building to heat colder areas.

W

  • Watt The electrical unit of power. The rate of energy transfer equivalent to 1 ampere flowing under a pressure of 1 volt at unity power factor.
  • West Texas Intermediate (WTI) US crude oil used as a benchmark for pricing much of the world.

Z

  • ZEE (Zeebrugge Gas Hub) The National Balancing Point is a virtual trading location for the sale and purchase and exchange of Belgian natural gas.