Glossary

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  • a
  • Arbitrage

    Arbitrage in the energy sector is the purchase and sale of electricity to profit from differences in price between delivery times. For example, a battery will buy and store electricity at low prices and sell the electricity at much higher prices time spots.

  • b
  • Baseload Contract

    A baseload contract describes continuous electricity production and demand for all hours contracted. For example, a 1 MW baseload contract requires the delivery of 1 MW per hour for every hour contracted. In the case of an EEX Yearly Baseload contract, the supplier has to provide 1 MW for all(...)

  • Blackout

    The loss of power to a portion of the distribution or transmission system due to imbalances in the system. As the power line frequency is varying from the nominal power of 50 hertz it can lead to a blackout.

  • c
  • Commercial Operation

    All approvals, permits, licenses, agreements and registrations that are required for the generator getting connected to the grid.

  • Committed Availability

    Percentage of actual number of available hours of the generator per year.

  • d
  • Day Ahead Market

    The day-ahead market enables market participants to sell and buy power one day before physical delivery. Most of the wholesale markets close the bidding at noon.

  • e
  • Electricity Generation Facility

    Any technology or device that generates energy for consumer use, including everything from utility-scale fossil fuel power plants to rooftop solar panels.

  • Energy Output

    The total amount of electricity generated by the generator per period during the term as measured at the point of delivery.

  • f
  • Fixed for Floating

    is a contractual arrangement (Swap) in which parties agree to swap cash flows (fixed rates vs. floating rates). These types of contracts are very popular arrangements when it comes to Power Purchase Agreements between RE projects and Corporates & Industrials (C&Is). When the power prices are(...)

  • Fixed for Floating

    Is a contractual arrangement (Swap) in which parties agree to swap cash flows (fixed rates vs. floating rates). These types of contracts are very popular arrangements when it comes to Power Purchase Agreements between RE projects and Corporates & Industrials (C&Is). When the power prices are(...)

  • Forward Market

    A market where delivery of the item purchased is at some future point in time.

  • Future Market

    A supply contract between a buyer and seller where the buyer is obligated to take delivery and the seller is obligated to provide delivery of a fixed amount of electricity at a predetermined price at a specific period in time. Futures are bought and sold through an exchange such as EEX in Europe.

  • g
  • Greenhouse Gas Protocol

    The first edition of the GHG Protocol was published in 2001 and clarifies how companies can measure emissions from electricity and other energy purchases, and account for emissions from throughout their value chains. All emissions are classified in the three categories Scope 1, Scope 2 and(...)

  • Grid emission rate factor

    The grid emission rate factor displays the average emissions generated by all energy facilities (e.g. coal, lignite) within a grid system. Often it is possible to calculate the emission factor on a smaller grid area to achieve higher accuracy.

  • Grid Parity

    When the LCOE of Renewables is equal to the LCOE of thermal plants, the so-called grid parity is achieved. Policymakers around the world introduced subsidies for renewables to provide incentives for many companies as possible to enter the renewable energy sector. Increased competition and(...)

  • h
  • Hydrogen (H)

    is the most abundant element in the universe and experiences a trend in the energy sector as its lacking of feasible storage systems. With the renewable energy transition at some times, there is much more electricity available as demanded and needs to be shifted to a period where less(...)

  • i
  • Imbalance

    The discrepancy between the amount of electricity delivered into the grid and the actual amount the entity consumes. These Power differences will be balanced by the grid operators through primary and secondary energy reserves (Imbalance Power).

  • Imbalance Power

    Power purchased by the system operator through auctioning necessary capacities to stabilize the grid as imbalances occur to keep the system supply in balance with demand.

  • Independent Power Producer (IPP)

    A generation company that is privaately-owned and not part of a regulated vertically-integrated utility company that sells commonly power output under a long-term contract.

  • Installed Capacity

    Actual installed capacity of the power plant usually in MWp

  • Intraday Market

    The intraday market enables trading 24/7 every day until one hour and in some cases until the delivery hour. In general, the intraday market supports market participants to optimize their power portfolios traded on the day-ahead market and reduce under/ -oversupply.

  • k
  • Kilowatt

    A unit of energy equal to 1,000 watts.

  • Kilowatt-hour (kWh)

    A unit of energy equal to 1,000 watts over 1 hour. Kilowatt-hours are most commonly known as a billing unit for energy delivered to consumers by power utilities.

  • l
  • Levelized Cost of Energy (LCOE)

    The Levelized Cost of Energy (LCOE) defines the costs that occur to transfer one energy form into electrical power (€/MWh or $/MWh). The LCOEs are derived by capital costs, the fix and variable operation costs, fuel costs, and targeted return expectations.
    In the last 10 years, LCOEs both for(...)

  • Load Shedding

    Load Shedding is a synonym used for Peak Shaving.

  • Load Shifting

    Load Shifting is defined as a short-term reduction of electricity consumption by rescheduling a certain amount of electricity to a later date when power prices or grid usage is lower. Load Shifting can be realized by turning on own onsite Electricity Generation Facilities or turning off(...)

  • m
  • Markt to Market

    Contracting parties do fix the power price when signing a Power Purchase Agreement. Each of the contracting party has different assumptions about the future price development of power markets. The real-time value of power is however determined at the time of generation by the real-time power(...)

  • Merchant Exposure

    In many liberalized markets, RE asset owners can sell the generated power in the energy wholesale markets (Spot and Future). Since power prices in wholesale markets are volatile and differ from hour to hour, RE asset owners are exposed to power prices (often referred to as merchant exposure).

  • Merchant Risk

    Merchant risk relates to volatile power sales on the wholesale market. Due to multiple effects, the power prices can fluctuate dramatically within a daily trading period or between individual years. On one side periods with high wind speeds relate to dropping short-term power prices du to high(...)

  • o
  • Off-peak

    Hours with the lowest power demand during the day. Off-peak products can be traded separately.

  • p
  • Peak

    Hours with the highest power demand during the day.

  • Power

    A synonym for electricity.

  • Price Volatility

    The movement of power prices over time on the spot market.

  • Production Guarantee

    Production Guarantee means the Independent Power Producer, or more precisely the Special Purpose Vehicle (SPV), has the obligation to deliver a certain volume during a certain period (i.e. Settlement Period). In case the production volume is below the guarantee amount AND the damage is solely(...)

  • s
  • Scope 1 Emission

    All Direct Emissions from the activities of an organisation or under their control. Including fuel combustion on site such as gas boilers, fleet vehicles and air-conditioning leaks.

  • Scope 2 Emission

    Indirect Emissions from electricity purchased and used by the organisation. Emissions are created during the production of the energy and eventually used by the organisation.

  • Scope 3 Emission

    All other Indirect Emissions from activities of the organisation, occuring from sources that they do not own or control. These are usually the greatest share of the carbon footprint, covering emissions associated with business travel, procurement, waste and water. In most of the cases the(...)

  • Spot market

    The spot market enables multiple market participants to trade multiple standard trading products (e.g.Day-Ahead, Futures etc.). Physical products have to be settled at least two days after the conclusion of the transaction. In general, the traded volume of the spot market represents about(...)

  • t
  • Termination Payment

    In case of termination following default by the other party,the termination payment represents the compensation of the default party. This can be either a formula based approach with linking to the power market or a fixed payment sum.

  • u
  • Utility

    An entity that generates, transmits, and/or distributes power from facilities that it owns and operates.

  • w
  • Wholesale Market

    The wholesale market enables power producers and buyers to sell or buy multiple energy-related products. In general, the traded energy volume on the wholesale market represents up to 20% of all electricity traded, because the highest amount is still traded over-the-counter (OTC). Overall the(...)