supplierswitch strongly believes in a straight-forward approach to business. We
work to avoid bizarre acronyms and unintelligible jargon, but some industry terms
are essential. Here is a glossary of the commonest industry terms...
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‘At the beach’
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When gas has been brought ashore to a
terminus by producers but is not yet in the
National Transmission system, it is called ‘at
the beach’.
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Backwardation
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A term used to describe an energy market in
which the anticipated value of the spot price in
the future is lower than the current spot price.
When a market is in backwardation, market
participants expect the spot price to go down.
The reverse situation is described as ‘contango’.
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Balancing Mechanism
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Provides the system operator (NGT) with the
means to match system-wide imbalances in the
supply and demand of electricity and to adjust
local and bulk power flows to ensure the
security of the power network. The operation of
the balancing mechanism begins after gate
closure.
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Baseload
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The minimum expected customer power
requirements at a given time. Baseload power is
generally supplied from larger plants, which
cannot be ramped up and down quickly, as
demand is generally predictable and steady. It is
less expensive than ‘peak’ power.
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BETTA
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‘British Electricity Trading and Transmission
Arrangements’ – arrangements designed to draw
Scotland into the British wholesale market for
trading power. Assuming all legislation is
passed, the scheme will operate from April 1,
2005.
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CV
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‘Calorific Value’ - a measure of the 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.
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Carbon Trust
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The Carbon Trust is an independent company funded
by the Government. Its role is to help the UK move
into a low carbon economy by assisting business and
the public sector to reduce carbon emissions now and
capture the commercial opportunities of low carbon technologies.
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CCL
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‘Climate Change Levy’ - this is a charge introduced by
the Government on UK non-domestic fuel 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.
It is a single stage tax imposed at the time of supply, rather than at the time
of use, to industrial and commercial consumers.
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Chargeable Supply Capacity (aka ‘Service
Capacity’, ‘Authorised Capacity and Availability’)
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The maximum capacity agreed with the distributor
or the highest maximum demand (usually, but not necessarily,
over the previous 12 months – this depends on the rules of the
relevant distribution company). Expressed in kVA.
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Contango
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Term used to describe an energy market in which 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
the spot price to go up. The reverse situation is described as ‘backwardation’.
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Data Aggregator (DA)
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The Data Aggregator is the organisation appointed to aggregate the meter-reading
data received from data collectors. This is then forwarded to the suppliers.
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Data Collector (DC)
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The Data Collector is the organisation responsible for collecting,
processing and validating the meter reading data, which is then passed to
the Data Aggregator.
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Distribution network
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Network for electricity distribution at voltages
below that of the transmission network.
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DM Supply Meter Point
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A gas Supply Meter Point deemed by the Transporter to be metered daily.
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EU ETS
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EU Emissions Trading Scheme (abbreviated as "EU ETS") - introduced across Europe
to tackle emissions of carbon dioxide and other greenhouse gases and combat the
serious threat of climate change.
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Excess Availability
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The calculated kVA monthly demand in excess of the agreed site capacity,
which is charged at a higher rate per kVA.
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Grid
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The electricity transmission system.
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kW
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Kilowatts – one thousand watts.
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kVA
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Kilo Volt Ampere – the unit of measure
used to express a meter’s available capacity.
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kVAr
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Kilo-Volt-Amperes Reactive – as above, but for reactive power.
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Kilowatt Hour (kWh)
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Unit of electricity equivalent to the power of one kilowatt
operating for one hour. For example, ten 100-watts light bulbs
burning for one hour would consume one kilowatt hour of electricity.
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Load Factor
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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.
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Meter Point
Administration Number
(MPAN)
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Unique number associated with a metering point. This identifies the
distribution company, and also provides such additional data as metering
information, profile class, time-switch code and line loss factor.
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Meter Point Reference (MPR)
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Unique number given by Transco to the point where the pipe meets the meter.
If the meter is exchanged, the MPR stays the same.
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MW
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Megawatts – a million watts.
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MWh
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Megawatt hour.
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NDM Supply Meter Point
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Any gas Supply Meter Point which is not a DM Supply Meter Point.
The volume of gas consumed at that supply point is recorded at monthly,
quarterly or longer intervals by traditional meter reading.
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NETA
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The ‘New Electricity Trading Arrangement’ introduced in March 2001
for England and Wales. NETA is a system of bilateral trading between generators,
suppliers and consumers on the UK market, with the aim of reducing wholesale
electricity prices.
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NGT
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National Grid Transco – the company that runs the English and
Welsh electricity and gas transmission networks
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Ofgem
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Office of Gas and Electricity Markets, the energy regulator.
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Renewable Energy/ Renewables
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Any form of energy that is replaced by nature, with or without
human assistance, including wind, solar, geothermal and tidal energy.
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Renewables Obligation
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An obligation on all electricity suppliers to buy a certain amount
of their power from renewable sources
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Shipper
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A company that transports gas along a pipeline system.
Shippers need to be registered with the local regulatory body.
In the UK gas market, a shipper is a company that buys gas ‘at the beach’ and
pays Transco to transport the gas along the pipeline system.
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Spot Price
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The price of a security or commodity in the cash market.
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Therm
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The imperial unit of measurement for a quantity of gas,
equivalent to 100,000 British thermal units. (1 Therm = 29.3071kWh)
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TW
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Terawatt – one million megawatts.
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TWh
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Terawatt hours.
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