The percentage of the time that electricity generating plant is available to produce electricity. The agreed level of electricity supply capacity made available by both the networks and the suppliers to meet the consumer’s highest likely monthly demand,“ measured in kVA. The site cannot exceed this specified amount without financial penalty and a modified connection agreement. Also see ‘Capacity Factor’. Also described as ‘Supply Capacity’.
calorific value (CV)
A measure of energy released as heat when a fuel is burned. It may be measured wet (with water vapour) or dry (after the water vapour has been removed). It may also be measured gross or net – gross includes the heat produced when the after vapour is condensed into a liquid, and net does not. Generally, CV is measured gross and dry.
The rated load-carrying capability of electrical equipment such as generators of transmission lines, typically expressed in megawatts or megavoltamperes. (Gas) the rated transportation volume of natural gas pipelines, typically expressed in millions of cubic feet per day.
Carbon Reduction Commitment (CRC)
The Carbon Reduction Commitment (CRC) is an innovative climate change and energy saving scheme for the UK. It will encourage improvements in energy efficiency which can save organisations money. The scheme has been designed to generate a shift in awareness in large organisations especially at senior level, and to drive changes in behavior and infrastructure.
The scheme is also a central part of the UK’s strategy for controlling our carbon dioxide (CO2) emissions. It will tackle CO2 emissions not already covered by Climate Change Agreements and the EU Emissions Trading System. This will help reduce the country’s carbon footprint to deliver the ambitious emissions reduction targets set in the Government’™s Climate Change Act. The scheme started in April 2010.
Climate Change Levy (CCL)
Climate Change Levy is a charge introduced by the Government on 1st April 2001 on UK non-domestic fuel – the Government’s aim in introducing the levy is to encourage businesses to use less energy, and contribute to the reduction of Carbon Dioxide emissions. The levy is applied as a specific rate per nominal unit of energy. There is a separate rate for each category of taxable commodity. The rates are based on the energy content of each commodity and are expressed in kWh for gas and electricity, and in kgs for liquid petroleum gas. The levy is a single stage tax imposed at the time of supply to industrial and commercial consumers rather than at the time of use.
Refers to the futures market. Includes everything beyond the current month going forwards.
data collector (DC)
The Data Collector or DC is the organisation responsible for collecting, processing and validating the meter reading data, who then passes the information to the Data Aggregator
data aggregator (DA)
The Data Aggregator or DA is the organisation appointed for aggregating the meter-reading data received from the Data Collectors and forwarded to the suppliers.
Device fitted to a meter that can record, store and transmit readings and measurements.
A measure of the variation of one day’s temperature against a standard reference temperature, typically 65 degrees Fahrenheit (18 degrees Celsius). Degree-days are used as a base for temperature-related weather derivative deals. There are both cooling degree-days (CDDs) and heating degree-days (HDDs). For example a firm take out a 30-day CDD swap with a reference temperature 65 degrees F, and the average temperature on each day is 70 degrees F. The company is then due 150 (30 x 5) degree-days multiplied by the sum of money agreed for each degree-days. If the firm had taken out an HDD swap, it would have owed the same amount of money.
distribution network operator
Manages the installation and upkeep of their cabling and the distribution of electricity from the point where it leaves the transmission system to the supply point. They are also often referred to as the host Regional Electricity Company (REC).
The balancing and settlement code company that procures and provides services to administer and implement the balancing and settlement rules. Signatories to the BSC contribute to the costs of Elexon. Charges are levied to recover the costs of running Elexon.
A guaranteed supply of natural gas that will not be subject to interruption.
forward price curve
A projection of the future price of a commodity or financial instrument over time, usually based on actual transactions.
The process of producing electrical energy by transforming other forms of energy. The amount of energy produced is expressed in watt hours.
Producer of electricity.
A unit of power equal to 1,000,000 megawatts.
The electricity transmission system.
half hourly data (HH data)
Electricity consumption data recorded every half hour and collected by the metering system.
half hourly metered
Describes measurement of electricity consumption in half hourly intervals through a meter complying with the relevant Code of Practice.
High Voltage. Supply voltage above 1000 volts (1kV).
Industrial and Commercial (non-domestic sector).
A unit of power equal to 1,000 Watts.
Kilowatt hour (kWh)
Equal to using a constant load of 1 kW for one hour. One kWh is equal to 0.03413 Therms.
Kilovoltampere. Unit of measurement for electricity available capacity and in some cases maximum demand. Referred to as KVArh when used to measure reactive power.
Liquefied Petroleum Gas (LPG)
Gas usually propane or butane, derived from oil and put under pressure so that it is in liquid form. Often used to power portable cooking stoves or heaters and to fuel some types of vehicle, e.g. some specially adapted road vehicles and forklift trucks.
The ratio between average and peak usage for electricity or gas customers. The higher the load factor, the smaller the difference between average and peak demand.
low voltage (LV)
Electricity supply voltage below 1,000 volts.
Market risk is the risk that values will be lost due to a change in some market variable, such as commodity or equity prices, interest rates or foreign exchange rates. The market risk of derivatives position may arise from a change in the value of the underlying market or from other sources such as implied volatility or time decay (theta).
maximum annual quantity [MAQ]
Annual quantity of gas multiplied by the MAQ percentage.
The highest average electricity demand occurring in a half hour period. Maximum demand tariffs comprise of a) fixed monthly charge, b) an availability charge per kVA of the highest demand expected, c) a price per unit for day and night units, d) a maximum demand charge based on the measured maximum number of units used in one half hour period in the month.
A unit of power equal to 1,000,000 watts
meter point reference number
Gas meter reference number.
Meter Operator (MO or MOP)
The Meter Operator or MO or MOP is the organisation appointed to install and maintain metering equipment.
meter operator agreement
Agreement between the customer and the nominated meter operator.
Meter Point Administration Number [MPAN]
Unique 21 digit number assigned to electricity meter(s) by MPAS under PRS (two tier number printed on electricity invoices preceded by an S. Top line referred to as Supplementary, bottom line as Core). Also known as Supply Number.
Microgeneration is the generation of zero or low-carbon heat and power by individuals, small businesses and communities to meet their own needs. Microgeneration refers to a number of different sustainable or highly efficient fossil fuel technologies that can generate heat and/or electricity in the domestic and commercial sector. Some forms of micro power use fuels or energy sources that produce no greenhouse gases and are therefore, classed as renewable energy, thus helping to combat climate change. Wind turbines, micro-hydro systems, heat pumps and Micro-Combined Heat and Power [CHP] are just three of the many types of small scale generation technologies which can help to attain at least two of the energy policy objectives; reductions in CO2 emissions and reliability of supply.
Meter Point Administration Service. Provides information regarding electricity supply to properties in their distribution network areas and regulates the registration process between electricity suppliers.
Megawatt hour -“ 1,000 kWh. A 1 MW power-generating unit running for 1 hour produces 1 MWh of electrical energy.
National Grid (NG)
NG owns, operates and develops the high-voltage electricity transmission network in England and Wales and Great Britain’s principal natural gas transportation system.
The designation by National Grid Transco of a gas supply point as being interruptible, allowing Transco the right to interrupt the gas supply for operational reasons.
Annual quantity of gas nominated by the customer as their annual estimated consumption requirement.
non-half hourly (NHH)
Properties with an MD under ~100kW. The Data Collector records the readings and other information using special handheld devices. The information from these devices is downloaded into the NHH DC system and forwarded via D10 dataflow to the Supplier.
Office of Gas and Electricity Markets (Ofgem)
A regulatory body set up by the government to ensure that the electricity market companies operate under a single set of conditions. They regulate such things as prices, business terminology and rules for communication between the market players (Customers, Suppliers, Distributors, Generators, Agents etc).
Period of relatively low system demand. These periods often occur in daily, weekly, and seasonal patterns; these off-peak periods differ for each individual electric utility.
The proportion of total electricity supplied to a site that is converted into useful energy output, as opposed to the wasted reactive power.
Rreactive power charge
Charge for reactive energy if the average power factor falls below a preset level, normally 0.9.
Renewables Obligation [RO]
An obligation on electricity suppliers to source a specified percentage of the total electricity supplied to their customers in Great Britain is from eligible renewable sources. This must be evidenced by Renewable Obligation Certificates.
Control and limitation of the risks faced by an organization due to its exposure to changes, in financial market variables, such as foreign exchange and interest rates, equity and commodity prices, or counterparty creditworthiness.
It may be necessary because of the financial impact of an adverse move in the market variable (market risk); because the organization is ill-prepared to respond to such a move (operational risk); because a counterparty defaults (credit risk); or because a specific contract is not enforceable (legal risk).
Market risks are usually managed by hedging with financial instruments, although a form may also reduce risk by adjusting its business practices (see natural hedge). While financial derivatives lend themselves to this purpose, risk can also be reduced through judicious use of the underlying assets – for example, by diversifying portfolios.
All commodity futures markets are affected to some extent by an annual seasonal cycle or ‘seasonality’. This cycle of pattern refers to the tendency of market prices to move in a given direction at certain times of the year.
A flat fee to cover the collection of electricity data by the data collector.
For the UK network each Half-hour during the day to which the system is balanced.
A company that transports gas along a pipeline system. Shippers need to be registered with the local regulatory body. In the UK gas market terms, a shipper is a company that buys gas ‘at the beach’ and pays Transco to transport the gas along the pipeline system.
Process by which a shipper informs National Grid Transco it wishes to supply gas to a new customer supply point.
Small and medium-sized enterprises.
See Supply Number.
The market where energy commodities are traded in cash/physically and delivered immediately, not as futures.
The price of a security or commodity in the cash market.
A charge designed to average over and recover from all customers on each tariff the elements of cost which are independent of consumption. Includes the costs associated with metering, billing and customer services.
Outlet of the gas metering facility at the customer’s premises to which an MPR is assigned or point at which electricity meter is fitted and to which MPAN is assigned.
Unique 21 digit number assigned to electricity meter point(s) by MPAS under PRS. A two tier number printed on electricity invoices preceded by an S, the top line being referred to as supplementary data and the bottom line known as the core MPAN. Also known as S-Number.
In a buyer’s contract, take-or-pay is the obligation to pay for a specified amount of gas, whether this amount is taken or not. Depending on the contract terms. Under-takes or over-takes may be taken as make-up or carry-forward into the next contract period. When it is credited into another contract period, this is called make-up gas.
Published standard charges applied to gas and electricity supplies that are not on a bespoke negotiated contract.
The imperial unit of measurement for a quantity of gas, equivalent to 100,000 British thermal units. One Therm is equal to 29.3071 kWh.
The gas system operator, part of NG.
Transmission use of System (TuoS) charges
TuoS charges are raised by the National Grid to Suppliers for their use of the national grid transmission network. These charges are normally passed on to the customer as part of the unit price shown on the bill. In the case of Supply Only Billing (SOBS) the TuoS charges are shown separately to the Supply charges and can change during the contract period as they are reviewed annually.
Transmission use of System Reconciliation (TRIAD)
The National Grid (NG) determines the three highest demands on the network between November and February. The average of the three demands is used by NG to calculate demand based transmission charges. Each customer’s demand during the three periods of highest demand, as published by the NG, is used to calculate the charge. each period at least 10 days apart, used to calculate the transmission charge for the NGC system.
National network for movement of power between power station and local distribution networks.
Terawatt – one million megawatts.
Terawatt hour = 1,000 GWH.
A measure of the variability of a market factor, most often the price of the underlying instrument. Volatility is defined mathematically as the annualised standard deviation of the natural log of the ration of two successive prices. The actual volatility realised over a period of time (the historical volatility) can be calculated from recorded data.
Unit of electrical energy equivalent to the power of one watt operating for one hour.
Price paid on the open markets for energy only i.e. excluding transportation and distribution charges, supplier margins etc.