A Helpful Guide



Definition: Any marketer, broker, public agency, city, county, or special district that combines the loads of multiple end-use customers in facilitating the sale and purchase of electric energy, transmission, and other services on behalf of these customers.


Definition: A UK medium-range gas storage facility.

American Gas Association (AGA)

Definition: An association that represents companies involved in all areas of the transmission and distribution of natural gas in the United States.

American Petroleum Institute 2 (API 2)

Definition: The benchmark price reference for coal imported into northwest Europe. The API 2 price is the primary price reference for physical and over-the-counter (OTC) coal contracts in northwest Europe. Some 90% of the world’s coal derivatives are priced against the Argus/McCloskey API 2 and API 4 indexes.

American Petroleum Institute 4 (API 4)

Definition: The price index for coal shipments free-on-board Richards Bay. Owned Argus, McCloskey and the South African Coal Report. Utilised less frequently than the API 2 Index for forward purchases of coal.

Amsterdam Power Exchange (APX)

Definition: An exchange that runs spot market platforms across Europe (formerly UKPX in the UK).

Amsterdam Rotterdam Antwerp (ARA)

Definition: A coal pricing hub

Anaerobic Digestion (AD)

Definition: A natural process in which micro-organisms break down the organic matter found in wet biomass waste (such as sewage sludge, animal manure and slurry, and waste food) in the absence of oxygen, to produce biogas (mainly a mixture of around 60% methane and 40% carbon dioxide) and digestate (a nitrogen rich fertiliser).

Ancillary Service

Definition: Necessary service that must be provided in the generation and delivery of electricity. As defined by the Federal Energy Regulatory Commission, they include coordination and scheduling services (load following, energy imbalance service, control of transmission congestion), automatic generation control (load frequency control and the economic dispatch of plants), contractual agreements (loss compensation service), and support of system integrity and security (reactive power, or spinning and operating reserves).

APX Reference Price Data (APX RPD)

Definition: A market data product that provides a volume-weighted reference price for each half-hour settlement period each day where such data is available.


Definition: The practice of taking advantage of a price difference between two or more markets.

Associated Gas

Definition: Natural gas found in a crude oil reservoir, separated from or in solution with the oil.


Definition: The percentage of the time that an electricity generating plant is available to produce electricity.


Definition: A market when spot prices are higher than future prices.

Bacton Interconnector

Definition: The interconnector for the transportation of gas from Bacton in Norfolk to mainland Europe via Zeebrugge in Belgium and vice versa.

Balance of Month (BOM)

Definition: The traded market for delivery for the remaining days in the month excluding the following day.

Balancing Mechanism

Definition: The mechanism by which electricity generation and demand are matched.

Balgzand Bacton Line (BBL)

Definition: The first natural gas pipeline between the Netherlands and the United Kingdom.

Barrels Per Day (B/D, BD, or BPD)

Definition: Used to express crude oil production and refinery throughput capacity (i.e. capacity of the crude distillation unit), liftings, forward demand projections, and crude consumption rates.

Base Load

Definition: Constant daily power load (24-hour) which under normal operating conditions does not vary and which is independent of the time of day or season of the year.

Base Load Capacity

Definition: The generating equipment normally operated to serve loads on an around-the-clock basis.


Definition: The differential that exists at any time between the cash (or spot) price of a given commodity and the price of the nearest futures contract for the same (or related) commodity. The basis may reflect different time periods, product forms, qualities, or locations.

Beach Gas

Definition: The point at which gas is brought ashore to terminals before entering the National Transmission System (NTS).

Bear Market

Definition: A market in a decline state.

Benchmark Crude

Definition: A crude oil whose price is used as a reference against which other crudes are priced. Because of their liquidity, the New York Mercantile Exchange light sweet crude oil and IPE Brent crude oil futures contracts are used as global benchmarks. Dubai crude is widely used as a benchmark for Middle Eastern crudes, especially for sale to Asian markets.


Definition: The price at which a party is willing to buy.

Bilateral Agreement (Trade)

Definition: A general agreement between two counterparties to buy or sell a contract outside a formal exchange or forward market OTC facility. With regard to energy, usually a direct contract between power producers and/or a user or broker.


Definition: Gas produced by the breakdown of organic matter in the absence of oxygen.


Definition: Biogas that has been upgraded to pipeline-quality gas. It is identical in properties to natural gas, but it is not derived from fossil fuels.


Definition: A complete interruption of power in a given service area. Rolling blackouts are controlled and usually pre-planned interruptions of service.

Bollinger Bands

Definition: An analytical tool that uses the concept of standard deviation to construct bands around the moving average, which in turn are used to create market signals.


Definition: An upward move exceeding a previously recorded high resistance level or through a bullish trendline or some other criteria, often on high volume.

British Thermal Unit (BTU)

Definition: A standard unit for measuring the quantity of heat energy equal to the quantity of heat required to raise the temperature of 1 pound of water by 1 degree Fahrenheit.


Definition: A high voltage direct current (HVDC) submarine power cable between the Isle of Grain in Kent, the United Kingdom and Maasvlakte in Rotterdam, the Netherlands.


Definition: Partial loss of power caused by unexpectedly high demand or problems with the physical delivery of electricity.

Bull Market

Definition: A market on the rise.

Bundled Utility Service

Definition: All generation, transmission, and distribution services provided by one entity for a single charge, including ancillary services and retail services.

Calorific Value (CV)

Definition: A measure of energy released as heat when a fuel is burned.


Definition: The rated load-carrying capability of electrical equipment such as generators of transmission lines, typically expressed in megawatts or megavoltamperes. For gas, the rated transportation volume of natural gas pipelines, typically expressed in millions of cubic feet per day.

Capacity Charge

Definition: An element in a two-part pricing method used in capacity transactions (energy charge is the other element). The capacity charge, sometimes called Demand Charge, is assessed on the amount of capacity being purchased.

Carbon Credit

Definition: A tradable financial instrument, normally representing one tonne of carbon equivalent. Carbon credits can be used by organisations to offset their carbon emissions, subject to certain criteria and depending upon which scheme they relate to. This allows for organisations to invest in large-scale carbon reduction projects and thus demonstrate carbon abatement activity in the form of carbon savings.

Carbon Dioxide (CO2)

Definition: A naturally occurring chemical compound composed of two oxygen atoms covalently bonded to a single carbon atom. Carbon dioxide is a greenhouse gas, warming the Earth's surface to a higher temperature by reducing outward radiation from being released.

Carbon Footprint

Definition: A measure of the total greenhouse gas emissions caused directly and indirectly by an organisation. It can also be assessed for a particular event, product, or individual. It is expressed as carbon dioxide equivalent.

Carbon Offsetting

Definition: Use of carbon credits by an organisation to buy in greenhouse gas emission savings produced externally to demonstrate emissions savings.

Carbon Reduction Commitment (CRC)

Definition: An innovative climate change and energy saving scheme for the UK that encourages improvements in energy efficiency, saving organisations money.


Definition: The prices charged to market participants who are imbalanced at the end of the day by the System Operator (SO). They reflect the costs incurred by the SO in addressing this imbalance.

Certified Emission Reduction (CER)

Definition: Commonly referred to as carbon credit, equivalent to one tonne of CO2 reduction, which are issued under Clean Development Mechanism (CDM) projects.


Definition: A market participant who uses technical analysis to chart the price patterns of commodities to make buy and sell decisions based on this analysis.


Definition: A market that is highly volatile.

Clean Dark Spread

Definition: The profit realised by a power generator after paying for the cost of coal fuel and carbon allowances.

Clean Development Mechanism (CDM)

Definition: One of the mechanisms established under the 1997 Kyoto Protocol for countries to meet their greenhouse gas emission targets. CDM allows for collaborative projects between countries in order to reduce emissions or sequester carbon in developing countries.

Clean Spread

Definition: The generating margin for gas- and coal-fired electricity plants after the cost of EU Emissions Trading Scheme (EU ETS) carbon allowances has been removed.


Definition: A mechanism by which transactions are settled through an organisation that assures settlement.

Climate Change Levy (CCL)

Definition: A levy on the taxable supply of specified energy products (taxable commodities) for use as fuels that are for lighting, heating, and power by business consumers including consumers in industry, commerce, agriculture, public administration, and other services. CCL does not apply to taxable commodities supplied for use by domestic consumers or to charities for non-business use.


Definition: Burning natural gas and another fuel type in order to decrease the amount of air pollutants and/or use the most competitively priced fuels available.

Combined Cycle Gas Turbine (CCGT)

Definition: The preferred technology used in gas-fired power generation.

Combined Heat and Power (CHP)

Definition: Integrated production of usable heat and power (electricity), in one single, highly efficient process. CHP generates electricity while also capturing usable heat that is produced in this process.

Combustion Turbine

Definition: A rotary engine that extracts energy from a flow of combustion gas.

Commodity Future

Definition: A futures contract on a commodity. Unlike financial futures, the prices of commodity futures are determined by supply and demand as well as the cost-of-carry of the underlying. Commodity futures can, therefore, either be in contango (where futures prices are higher than spot prices) or backwardation (where futures are lower than spot).

Competitive Transition Charge

Definition: A non-bypassable charge levied on each customer of a distribution utility, including those who are served under contracts with non-utility suppliers, for recovery of a utility's transition costs.

Compressor Station

Definition: Station used to recompress gas that has lost pressure due to long distance transmission to the required pressure.


Definition: A condition that occurs when insufficient transfer capacity is available to implement all of the preferred schedules for electricity transmission simultaneously.


Definition: Term used to describe an energy market in which the anticipated value of the forward price 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.

Counterparty Risk

Definition: The risk that a counterpart to a transaction or contract will default on its obligation under the contract.

Crack Spread

Definition: A type of commodity product spread involving the purchase of crude oil futures and the sale of gasoline and heating oil futures.

Credit Risk

Definition: The risk that a financial loss will be incurred if a counterparty to a derivatives transaction does not fulfil its financial obligations in a timely manner.


Definition: Refers to the futures market and includes everything beyond the current month going forwards.

Customer Choice

Definition: Allowing all customers to purchase kilowatt-hours of electricity from any of a number of companies that compete with each other..

Dark Spread

Definition: The gross margin derived from a coal-fired plant in generating a unit of electricity from the acquisition of the coal from the market requiring this unit of electricity.

Data Collector (DC)

Definition: The organisation responsible for collecting, processing, and validating the meter reading data, who then passes the information to the data aggregator.

Data Aggregator (DA)

Abbreviation: DA

Definition: The organisation appointed for aggregating the meter reading data received from the data collectors and forwarded to the suppliers.


Definition: Device fitted to a meter that can record, store, and transmit readings and measurements.

Day-ahead Market (DA)

Definition: A traded market for the delivery to be the following day.

Day-ahead Schedule

Definition: A schedule prepared by a Scheduling Coordinator or the Independent System Operator before the beginning of a trading day. This schedule indicates the levels of generation and demand scheduled for each settlement period that trading day.

Degree Day

Definition: A measure of the variation of one day’s temperature against a standard reference temperature, typically 65 Fahrenheit/18 Celsius. Degree days are used as a basis for temperature-related weather derivative deals.

Delivery Capacity

Definition: The maximum rate at which a natural gas buyer can request the seller to deliver gas into the pipeline and which the seller has a firm obligation to deliver.

Delivery Only Providers

Definition: Owners and operators of transmission and distribution system equipment that provide billing and related energy services for the transmission and delivery of electricity.

Delivery Month

Definition: The month in which a futures contract matures and can be settled by physical delivery. Also known as the contract month.


Definition: The rate at which energy is delivered to loads and scheduling points by generation, transmission, and distribution facilities.

Demand (Electric)

Definition: The rate at which electric energy is delivered to or by a system, part of a system, or piece of equipment, at a given instant or averaged over any designated period of time.

Demand Bid

Definition: A bid into the power exchange indicating a quantity of energy or an ancillary service that an eligible customer is willing to purchase and, if relevant, the maximum price that the customer is willing to pay.

Demand-side Management

Definition: Action by consumers of energy to control and alter their usage, typically in response to energy price signals or electrical spikes. It is usually done through a third party organisation with qualified in-house expertise and systems..


Definition: A financial instrument derived from a cash market, futures contract, or other financial instrument. Derivatives can be traded on regulated exchange markets or over-the-counter.


Definition: Where natural gas is input into a pipeline system at one end and the same volume is removed from the other.

Distribution Network Operator (DNO)

Definition: 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).


Definition: Activities in the oil and natural gas industry from a refinery onwards – e.g. the distribution and marketing of hydrocarbon products.

Electric Service Provider

Definition: An entity that provides electric service to a retail or end-use customer.

Electric Utility

Definition: A corporation, person, agency, authority, or other legal entity or instrumentality that owns and/or operates facilities within the United States, its territories, or Puerto Rico for the generation, transmission, distribution, or sale of electric energy primarily for use by the public and files forms listed in the Code of Federal Regulations, Title 18, Part 141. Facilities that qualify as cogenerators or small power producers under the Public Utility Regulatory Policies Act (PURPA) are not considered electric utilities.

Electrical Spikes

Definition: Fast, short duration electrical transients (a temporary excess of voltage and/or current in an electrical circuit that has been disturbed).

Electricity Forward Agreement

Definition: A contract calling for the delivery of and payment for electric power in a future period.

Electricity Forward Agreement Day

Definition: A twenty-four hour period commencing at 23:00.

Electricity Forward Agreement Month

Abbreviation: EFA Month

Definition: A month calculated in accordance with a pattern of days generally known in the UK electricity market and not necessarily equating with a calendar month.

Electricity Forward Agreement Quarter

Definition: A quarter calculated in accordance with a pattern of days generally known in the UK electricity market.

Electricity Forward Market

Definition: A brokered over-the-counter market in the UK for short to medium term electricity derivative instruments, of which the most widely used is the electricity forward agreement.


Definition: 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.

Elliott Wave Theory

Definition: A theory of market behaviour published by Ralph Nelson Elliott in the 1930s. According to the theory, the stock market follows a pattern of five waves up and three waves down to form a complete cycle.

Embedded Costs

Definition: The cost of all the facilities in an electricity or natural gas supply system.

EU Emissions Trading Scheme (EU ETS)

Definition: One of the policies being introduced across Europe to reduce emissions of carbon dioxide.

Emission Reduction Unit (ERU)

Definition: One tonne of CO2 equivalent abatement as achieved through a joint implementation project. ERUs can be traded in greenhouse gas trading systems.

End User

Definition: The consumer of electricity or gas.

Entry Cost

Definition: A tariff for using the UK’s national gas transmission system.

European Emission Allowance (EUA)

Definition: Carbon credit that is issued under the EU ETS, equivalent to one tonne of CO2.

European Energy Exchange

Definition: An exchange offering futures and spot markets in electricity and carbon.


Definition: A trading arena where commodities and securities are bought and sold.

Export Metering

Definition: The enabling of a site to export its generated electricity.

Far Curve

Definition: The forward curve beyond the first two front seasons..

Feed-in Tariff (FIT)

Definition: A government scheme introduced in April 2010 to incentivise renewables micro-generation with guaranteed long-term payments for qualifying generated power. Funded by consumers via suppliers.


Definition: Crude products, natural gas, chemicals, or raw material used in a refinery, liquefied natural gas plant, or petrochemical plant for processing into a finished product.

Fibonacci Ratio

Definition: The relationship between two numbers in the Fibonacci sequence. The sequence for the first three numbers is 0.618, 1.0, and 1.618. In general terms, the Fibonacci series is 1, 1, 2, 3, 5, 8, 13, 21, 34, 55, 69, etc.

Financial Services Authority *(FSA)

Definition: The regulator of the financial services industry in the UK.

Firm Gas

Definition: Gas sold on a continuous and generally long-term contract.

Firm Power

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


Definition: A price that is neither rising nor falling.


Definition: A supply contract between a buyer and seller of a commodity, whereby the seller is assured that it will receive at least some minimum price. This type of contract is analogous to a put option, which gives the holder the right to sell the underlying at a predetermined price.

Flue Gas Desulphurization (FGD)

Definition: A technology used for removing sulphur dioxide (SO2) from the exhaust flue gases of fossil fuel power plants. Power plants that have opted-in to the LCPD need to fit FGD equipment in order to comply with SO2 limit values.

Force Majeure

Definition: A contract clause that allows a supplier to forgo his obligation to supply in extreme circumstances, such as political crisis, war, or strikes, that disturb production.

Forward Curve (FC)

Definition: The futures market, includes everything beyond the current month going forwards.

Forward Trading

Definition: Trading that consists of trades over a longer duration than prompt and spot trading, with contracts for delivery over months, seasons, or years.

Fossil Fuel

Definition: Fuel that is formed by natural processes such as anaerobic decomposition of buried dead organisms.

Front Month

Definition: Refers to delivery of a commodity in the month and year to follow.

Fundamental Analysis

Definition: Analysis of supply and demand factors that could influence the direction of price of a commodity.

Futures Contract

Definition: An exchange-traded supply contract between a buyer and a seller, whereby the buyer is obligated to take delivery of a fixed amount of a commodity at a predetermined price at a specified location. Futures contracts are traded exclusively on regulated exchanges and are settled daily based on their current value in the market.


Definition: A middle distillate and form of heating oil used primarily in heating and air conditioning.

Gas Year

Definition: In the UK, the gas year begins at 6:00 on the 1st October. This is also known as the contract year, as it is when purchase contracts begin.


Definition: The process of producing electrical energy by transforming other forms of energy. The amount of energy produced is expressed in watt hours.


Definition: Producer of electricity.

German Power Index

Definition: An electricity price index for the whole of Germany, launched by Dow Jones in Jan 2001.

Gigawatt (GW)

Definition: A unit of power equal to 1,000MW/1,000,000kW.

Greenhouse Gas (GHG)

Definition: A gas in an atmosphere that absorbs and emits radiation. The primary greenhouse gases in the Earth's atmosphere are water vapour, carbon dioxide, methane, nitrous oxide, and ozone.

Grid Supply Point (GSP)

Definition: The point at which energy is taken from the National Grid transmission system into a local distribution system.

Grid Trade Master Agreement (GTMA)

Definition: A legal document that sets out the terms of the agreement with regard to financially settling a contract and physically delivering power.

Half-hourly Data

Definition: Electricity consumption data recorded every half hour and collected by the metering system.

Head and Shoulders Top

Definition: A pattern characterised by a series of three peaks, the first and third being lower than the middle. Volume, heavy on the first peak, declines on the next two. Completion is marked by the breaking of the “neckline” (an extension of the line connecting the troughs between the three peaks) accompanied by heavy volume. An inverse head and shoulders is the same pattern upside down volume increase through the pattern.


Definition: A trade to reduce the impact of price variations.

Henry Hub

Definition: The Henry Hub is a distribution hub on the natural gas pipeline system in Erath, Louisiana. Due to its importance, it lends its name to the pricing point for natural gas futures contracts traded on the New York Mercantile Exchange (NYMEX) and the OTC swaps traded on Intercontinental Exchange (ICE).

High Voltage (HV)

Definition: Connection to an electricity distribution network at a voltage of 11,000 (11kV) or above.

High-voltage Direct Current Cross-channel (HVDC CC)

Definition: Two different high-voltage direct current connections that operate or have operated under the English Channel between the continental European and the British electricity grids.

High-voltage Direct Current Moyle

Definition: A high-voltage direct current link between Auchencrosh, South Ayrshire in Scotland and Ballycronan More, County Antrim in Northern Ireland.

Hydraulic Fracturing

Definition: The fracturing in a rock layer by a pressurised fluid, commonly known as fracing, fraccing, or fracking. A technique used to release petroleum, natural gas (including shale gas, tight gas, and coal seam gas), or other substances for extraction.


Definition: Electrical energy produced by flowing water. A hydroelectric power plant uses the movement of water to spin a turbine generator that produces electricity.


Definition: A situation where there is a difference between the amount of power produced (supply) and the amount of electricity contracted or sold (demand).


Definition: Where a site consumes electricity as opposed to generating and exporting power.


Definition: A sharply defined change in a series of input data being studied, such as market prices or volume.

Impulse Wave

Definition: A wave or cycle of waves that carries the current trend further in the same direction.


Definition: A numerical value assigned to a group of commodities, stocks. or prices in order to give an indication of market trends.


Definition: A subset of market measuring tools used specifically for monitoring and forecasting.


Definition: The process of placing natural gas in underground storage or the producing reservoir in order to maintain pressure.


Definition: A cable connection allowing electricity to flow between two countries or markets.

Interconnector United Kingdom (IUK)

Definition: Interconnector (UK) Limited, the consortium of European energy companies that owns and operates the Bacton interconnector.

Interconnexion France Angleterre (IFA)

Definition: The England-France Interconnector is a 2,000MW high-voltage direct current (HVDC) link between the French and British transmission systems with ownership shared between National Grid and Réseau de Transport d'Electricité (RTE).

Intercontinental Exchange (ICE)

Definition: A major operator of regulated exchanges and clearing houses serving the risk management needs of global markets for agricultural, credit, currency, emissions, energy, and equity index products.

International Monetary Fund (IMF)

Definition: An organisation of 188 countries, working to foster global monetary cooperation, secure financial stability, facilitate international trade, promote high employment and sustainable economic growth, and reduce poverty around the world.

International Petroleum Exchange (IPE)

Definition: Formerly an independent London energy exchange, in June 2001, the IPE became a wholly owned subsidiary of Intercontinental Exchange. It offers futures and options contracts for energy products including oil, gasoil, natural gas, and power.

Interruptible Service

Definition: Gas contracts that are subject to interruption for a specified number of days or hours during times of peak demand or in the event of system emergencies. In exchange for interruption to their supply, buyers pay lower prices.

Isle of Grain

Definition: LNG import and storage facility.

Isle of Man to England Interconnector

Definition: A submarine power cable connecting the transmission system of the Manx Electricity Authority to that of Great Britain. With an undersea section of approximately 104 kilometers, it is the longest AC undersea cable in the world.

Joint Implementation

Definition: A mechanism that allows an Annex B country with an emissions reduction/litigation commitment under the Kyoto Protocol to earn Emissions Reduction Units (ERUs) through emission reduction/removal projects in a fellow Annex B country.

Kilovoltampere (kVA)

Definition: A unit of measurement for electricity available capacity and, in some cases, maximum demand. Referred to as kVArh when used to measure reactive power.

Kilowatt (kW)

Definition: A unit of power equal to 1,000 Watts

Kilowatt Hour

Definition: The amount of energy used by a 1kW load if this is consumed for an hour.


Definition: A natural gas processing plant owned and operated by Statoil on the southern part of the island Oøy in Øygarden, Norway.


Definition: An underwater pipeline transporting Norwegian natural gas to the United Kingdom.

Large Combustion Plant Directive (LCPD)

Definition: A European Union directive that aims to reduce acidification, ground level ozone, and particulates by controlling the emissions of sulphur dioxide, oxides of nitrogen, and dust from large combustion plants.


Definition: Wholesale power and gas trades may compromise of different parts often referred to as legs.

Levy Exemption Certificates

Definition: A certificate allocated to qualify power generation to counteract the effect of the UK Climate Change Levy (CCL).


Definition: A high level of trading activity, allowing buying and selling with minimum price disturbance. Also, a market characterized by the ability to buy and sell with relative ease.

Liquified Natural Gas (LNG)

Definition: Gas that is super-cooled to form a liquid for ease of storage and transportation.

Liquified Petroleum Gas (LPG)

Definition: A flammable mixture of hydrocarbon gases used as a fuel in heating appliances and vehicles.

Load factor

Definition: 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.

Local Distribution Zones (LDZ)

Definition: The zones that National Grid Transco has divided the UK into for the purpose of calculating shippers’ charges for transporting gas within the national transmission system.

Local Transmission System (LTS)

Definition: The pipeline systems operating at pressures about half those of the NTS that take gas from NTS off takes and transport it to end-users/consumers via downstream LDSs and direct to some larger users.

Long Position

Definition: A position where a party is holding more of a security, contract, or commodity than they need to fulfil their demand for the period in question. A party who has taken a long position would benefit from the security, contract or commodity increasing in price.


Definition: Refers to a period of time often measured in terms of months or years.

Low Voltage (LV)

Definition: Electricity supply voltage below 1,000 volts.


Definition: Calculation of the value of a financial instrument (or portfolio of such instruments) at current market rates or prices. Marking-to-market on a daily (or more frequent) basis is often recommended in risk management guidelines.

Market Clearing Price

Definition: The price at which supply equals demand for the day-ahead and hour-ahead markets.

Market Maker

Definition: An energy trader or firm that is prepared to buy and sell in the derivatives market to provide a two-sided (bid/ask) market and greater liquidity.

Market Risk

Definition: The risk that value will be lost due to a change in some market variable, such as commodity or equity prices, interest rates, or foreign exchange rates.

Maximum Annual Quantity (MAQ)

Definition: Annual quantity of gas multiplied by the MAQ percentage.

Maximum Demand (MD)

Definition: The highest average electricity demand occurring in a half-hour period. Maximum demand tariffs comprise of fixed monthly charge, an availability charge per kVA of the highest demand expected, a price per unit for day and night units, and a maximum demand charge based on the measured maximum number of units used in one half-hour period in the month.

McCloskey (Coal)

Definition: A source of news, analysis, and data on the international coal industry.

Megawatt (MW)

Definition: A unit of power equal to 1,000,000 Watts.

Megawatt Hour

Definition: The amount of energy used by a 1MW load if it is consumed for an hour.

Meter Operator Agreement

Definition: An agreement between the customer and the nominated meter operator.

Meter Point Administration Number (MPAN)

Definition: The unique reference number for each electricity supply point, also referred to as the supply number.

Meter Point Reference Number (MPRN or MPR)

Definition: The unique reference number for each gas supply point, also referred to as the supply number.


Definition: The generation of zero or low-carbon heat and power by individuals, small businesses and communities to meet their own needs.

Million Cubic Meters (MCM)

Definition: A measurement of a volume of gas in cubic meters (1 MCM of gas = 358,694 therms).

Million Mega Joules (MMJ)

Definition: A measurement of energy in joules (1 MMJ= 9,478 therms).


Definition:One seller with control over market sales.

Moving Average (MA)

Definition: A continuous smoothing technique computed by averaging a series of numbers (price, volume, etc.) progressively over a period of time. Often plotted on a chart with the raw data.

Moving Average Convergence Divergence

Definition: Combines Moving Average (trend following) and Oscillator principles to create a dual Moving Average crossover approach. The chart is used to create the following signals:
1) Buy signal: This is initiated where the shorter-term average of MACD crosses above the longer-term average or signal line.
2) Sell signal: This is initiated where the shorter-term average of MACD crosses below the longer-term average or signal line..


Definition: The UK market offering that is a marketplace for physical UK power contracts. The market is run jointly between NPS (Nord Pool Spot) and NOMXC (NASDAQ OMX Commodities).

National Balancing Point (NBP)

Definition: A virtual trading location for the sale and purchase and exchange of UK natural gas.

National Grid

Definition: The entity that owns and maintains the high-voltage electricity transmission system in England and Wales, together with operating the system across Great Britain, balancing supply with demand on a minute by minute basis. National Grid owns and operates the National Transmission System aswell and owns and operates a significant gas distribution network throughout the heart of England.

National Grid Transco (NGT)

Definition: The operator and owner of the National Grid and National Transmission System.

National Transmission System (NTS)

Definition: The UK high-pressure pipeline system, owned by National Grid Transco (NGT), used to transport gas between terminals, storage facilities, large consumers, and regional sites.

Negawatt power

Definition: A theoretical unit of power representing an amount of energy (measured in watts) saved. The energy saved is a direct result of energy conservation or increased energy efficiency.


Definition: An agreement that offsets the value of contracts by creating a single net exposure between counterparties.

New Electricity Trading Arrangements (NETA)

Definition: A system of bilateral trading between generators, suppliers, and consumers on the UK market, the aim of which is to reduce wholesale electricity prices.

New York Mercantile Exchange (NYMEX)

Definition: A commodity futures exchange that handles billions of dollars worth of energy products, metals, and other commodities being bought and sold on the trading floor and the overnight electronic trading computer systems for future delivery. The prices quoted for transactions on the exchange are the basis for prices that people pay for various commodities throughout the world.

Nominated Consumption

Definition: Annual quantity of gas nominated by the customer as their annual estimated consumption requirement.

Nominated Interruption

Definition: 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.

Non-firm Service

Definition: Electricity transmission service offered to customers that anticipates possible interruption of deliveries.

Non-half-hourly (NHH)

Definition: Properties with maximum demand 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.


Definition: Times of relatively low energy demand, typically evenings and weekends..


Definition: The price at which a party is willing to sell.

Office of Gas and Electricity Markets (OFGEM)

Definition: An entity that supervises and develops energy markets, regulation, and the delivery of government schemes.


Definition: Gas removed from the National Transmission System at reduced pressure.

On-day Commodity Market Trading System (OCM)

Definition: An anonymous trading service on the National Balancing Point that offers or requests gas at a specific price.

One in Fifty (1 in 50)

Definition: The highest gas demand expected in a single year out of 50 years. The UK gas pipeline system is designed to cope with this calculated level of demand.

Operational Risk

Definition: The risk that a firm’s internal practices, policies, and systems are not adequate to prevent a loss being incurred, either because of market conditions or operational difficulties.

Organisation of Petroleum Exporting Countries (OPEC)

Definition: Vienna-based Organisation of Petroleum Exporting Countries. Opec members are: Algeria, Indonesia, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, Venezuela, and United Arab Emirates.

Ormen Lange

Definition: The largest natural gas field in development on the Norwegian continental shelf.


Definition: The shutdown of a generating unit, transmission line, or other facility for inspection and maintenance, in accordance with a previous determined schedule. A forced outage is the unplanned loss of service of a generating unit, transmission line, or other facility for purposes other than inspection and maintenance.

Over-the-counter (OTC)

Definition: Derivative products such as forwards, swaps, and exotic options, are traded on the over-the-counter (OTC) market. This is not a formal market centred on an exchange, but rather a telephone and screen-based market with no administrative centre. Contracts are made on a bilateral basis with the terms negotiated separately for each transaction.

Pacific Basin

Definition: Region bordering the Pacific Ocean where natural gas and petroleum are extracted..

Pass-through Charges

Definition: Charges that appear on bills to cover the costs of third parties involved in the energy supply chain to deliver a customer's power.

Peak Load

Definition: Electricity load between 7:00 and 19:00 Monday to Friday.

Peak Power Contract

Definition: A contract traded solely for the period 7:00 to 19:00 on weekdays only for the duration of the contract in question.

Peak Shaving

Definition: During times of peak demand, supplies from sources other than normal suppliers are used to reduce demand on the system.

Physical Electricity Index (Phelix)

Definition: The reference price for power in Germany and large parts of central Europe.

Power Exchange

Definition: An entity set up to provide an efficient, competitive trading area, open on a non-discriminatory basis to all electricity suppliers, which meets the loads of all exchange customers at efficient prices.

Power Factor (PF)

Definition: The relationship between kw and KVa in an electrical circuit..

Power Marketers

Definition: Business entities engaged in buying, selling, and marketing electricity. They do not usually own generating or transmission facilities. They take ownership of the electricity and are involved in interstate trade. These entities file with the Federal Energy Regulatory Commission for status as a power marketer.

Power Purchase Agreement (PPA)

Definition: A contract between two parties, one that generates electricity for the purpose of sale (the seller) and one that is looking to purchase electricity (the buyer).


Definition: A Paris-based company operating a European energy exchange that provides an electronic market for the trading of energy contracts in Europe.

Price Cap

Definition: Price control over electricity or gas prices.

Prompt Market (PM)

Definition: Refers to trading for delivery between (but not including) within-day trading and the next month (front-month). This includes a number of products, such as products for delivery in the following day (e.g. day-ahead), weekend, weekdays, and trades for the balance of the week and balance of the month.


Definition: A trading strategy that identifies stocks trading in channels. By finding major support and resistance levels with technical analysis, a trend trader buys stocks at the lower level of support (bottom of the channel) and sells them near resistance (top of the channel).

Reactive Power (kVAr)

Definition: Power that converts current flow into wasted energy, meaning cables and switchgear have to be larger than necessary, measured in kilovolt amps (kVAr).


Definition: The vaporisation of liquefied natural gas (LNG) after transport to its destination.


Definition: The governmental function of controlling or directing economic entities through the process of rulemaking and adjudication.

Relative Strength Index (RSI)

Definition: RSI measure of the momentum in a trend. It creates the following signals:
1) Overbought conditions: This occurs where the RSI rises above 70 on the chart.
2) Oversold conditions: This occurs where the RSI falls below 30 on the chart.
3) Buy signals: This occurs where the RSI falls below 30 and subsequently rises back above 30.

Renewable Energy

Definition: Green electricity produced from non-fossil fuels and non-nuclear sources, e.g. wind power, solar power, and some waste burning sources. It is exempt from the Climate Change Levy (CCL).

Renewable Energy Guarantee of Origin (REGO)

Definition: Price control over electricity or gas prices.

Renewable Heat Incentive (RHI)

Definition: The world’s first long-term financial support programme for renewable heat. A scheme for the non-domestic sector that provides payments to industry, businesses, and public sector organisations.

Renewables Obligation (RO)

Definition: Introduced in 2002 to encourage the growth of renewable energy sources. It requires energy suppliers to buy a portion of their electricity from renewable sources such as biomass, wind power, photovoltaic cells, hydro electric, and wave power.

Resistance Level

Definition: In the Elliott Wave Theory, refers to a minor move against the primary trend where the length is mostly a Fibonacci percentage of the previous move.


Definition: The process of replacing a monopoly system of electric utilities with competing sellers, allowing individual retail customers to choose their electricity supplier but still receive delivery over the power lines of the local utility. It includes the reconfiguration of the vertically-integrated electric utility.


Definition: Sales covering electrical energy and natural gas supplied for residential, commercial, and industrial end-use purposes. Other small classes, such as agriculture and street lighting, also are included in this category.

Retail Competition

Definition: The concept under which multiple sellers of electric power and natural gas can sell directly to end-use customers and the process and responsibilities necessary to make it occur.


Definition: A level where the price tends to find resistance when rising, meaning that the price is likely to bounce off this level rather than breaking through it. Opposite of support level.

Risk Management

Definition: Control and limitation of the risks faced by an organisation due to its exposure to changes, in financial market variables, such as foreign exchange and interest rates, equity and commodity prices, or counterparty creditworthiness.

Risk Premium

Definition: A payment that factors in the inherent risk of a trade.

Rotterdam Market

Definition: A term sometimes used to describe the oil market in Northwest Europe. There is no Rotterdam trading floor, as oil business is transacted electronically, by telephone or on the futures markets in New York, London, or Singapore.

Rough Storage Facility

Definition: A closed storage facility for gas shippers, gas producers, suppliers, and traders, allowing them to nominate gas for withdrawal into the National Transmission System (NTS) and inject gas into the reservoir on demand. Rough was situated off the east coast of England and was one of the largest gas storage facilities owned by Centrica.


Definition: The annual seasonal cycle that affects the price of commodity futures.

Secular Market

Definition: A market driven by forces that could be in place for many years, causing the price of a particular investment or asset class to rise or fall over a long period of time. In a secular bull market, strong investor sentiment drives prices higher, as there are more net buyers than sellers. In a secular bear market, weak sentiment causes selling pressure over an extended period of time.

Settlement Period

Definition: For the UK network, each half hour during the day to which the system is balanced.

Settlement Risk

Definition: The risk that arises when payments are not exchanged simultaneously.


Definition: 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.

Short Position

Definition: A position where a party is holding less of a security, contract, or commodity than they need to fulfil their demand for the period in question. A party that has taken a short position would benefit from the security, contract or commodity decreasing in price.


Definition: Refers to a period of time often measured in terms of days or weeks.

Simple Moving Average

Definition: The average price paid over a pre-determined time period. A trend following device that helps identify the prevailing market trend and changes in the trend early in the cycle. Our analysis uses:
1) 20-day Simple Moving Average: The average price over the last 20 days. This is a shorter-term average.
2) 50-day Simple Moving Average: The average price over the last 50 days. This is a medium-term average.
3) 200-day Simple Moving Average: This is the price over the last 200 days. This is a long term-average.

Site Nomination

Definition: The process by which a shipper informs National Grid Transco it wishes to supply gas to a new customer supply point.


Definition: A transaction whereby two counterparties, which do not have credit with each other, as a third party that has credit with both to be a middleman to facilitate a trade.

Slick Spread

Definition: TThe relationship between oil and power. The calculation is dependent upon time frames and oil products and rarely quoted as something that trades as a spread and is more likely to be implied using the legs.

Spark Spread

Definition: The gross margin derived by a CCGT plant in generating a unit of electricity from the acquisition of the wholesale gas required to generate this unit of electricity.


Definition: A financial action that does not promise safety of the initial investment along with the return on the principal sum.


Definition: Surplus electricity that a generator has produced but has not contracted to provide to market counterparties.

Spinning Reserves

Definition: Any back-up energy production capacity that can be made available to a transmission system at 10 minutes’ notice and can operate continuously for at least two hours once it is brought online.

Spot Market

Definition: The price of a security or commodity in the cash market.


Definition: The difference between the bid and ask price. Liquid markets are characterised by narrow spreads.

St Fergus Gas Terminal

Definition: A set of four gas processing plants in St Fergus, Aberdeenshire, Scotland. They are owned by Centrica, Shell, Total, and Esso. This terminal is the most important one for the United Kingdom as it provides around 20% of the United Kingdom's gas supply.

Standing Charge

Definition: 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.

Storage Capacity

Definition: The amount of gas that can be stored to cover peak demand. The main types of storage (apart from pipeline storage) are:
1) Liquefied Natural Gas
2) Salt Caverns
3) Aquifers (porous rocks)
4) Depleted gas fields now converted into storage facilities.


Definition: A person authorised by a supply licence to supply electricity or gas.

Supply Number

Definition: A 21-digit number assigned to an electricity meter points 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.

Support Level

Definition: A price level where the market tends to find support when falling. The price is more likely to bounce off this level rather than breaking through it.


Definition: An agreement whereby a floating price is exchanged for a fixed price over a specified period. Also known as Contracts for Differences.


Definition: Variations in gas demand.

Swing Producer

Definition: A company or country that changes its crude oil output to meet fluctuations in market demand. Saudi Arabia is seen as the world’s major swing producer as it deliberately limits its crude oil production in an attempt to keep supply and demand roughly in balance.

System Buy Price (SBP)

Definition: The cash-out price or imbalanced price, which is used to settle the difference between contracted generation or consumption and the amount that was actually generated or consumed in each half-hour trading period.

System is Long

Definition: A system that is over-supplied.

System is Short

Definition: A system that is under-supplied.

System Sell Price (SSP)

Definition: The price paid in the Balancing Mechanism to a party that has more electricity than it requires to meet its contractual commitments. Prices are very volatile and often negative, meaning that a payment would need to be made to dispose of the unwanted electricity produced.

Take or Pay

Definition: The obligation on a customer to pay for a specified amount of energy if it is taken or not.


Definition: Published standard charges applied to gas and electricity supplies that are not on a bespoke negotiated contract.

Taxable Commodities

Definition: There are four groups of taxable commodities, and are as follows: electricity, natural gas when supplied by a gas utility, liquid petroleum gas (LPG), and other gaseous hydrocarbons in a liquid state, coal and lignite; coke, semi-coke of coal or lignite, and petroleum coke.

Technical Analysis

Definition: Analysis based on the assumption that price takes into consideration all factors that could influence the price of the commodity. It is, therefore, broader than fundamental analysis, which looks at supply and demand. Past price movements can be analysed for indications of future price movements.

Technical Rally

Definition: A short rise in commodity futures prices within a general declining trend. Such a rally may result from bargain hunting by market participants or because technical analysis have noticed a particular support level at which the commodity price is expected to increase.

Terawatt (TW)

Definition: One trillion watts (1,000 GW).


Definition: The imperial unit of energy used for gas, the metric equivalent in kilowatt hours (1 therm = 29.3071kWh)

Third-party-access (TPA)

Definition: Where the owner of a pipeline or electricity network is obliged to transport gas, crude, or electricity in a non-discriminatory way.


Definition: When an ask price is equal or very close to the price of a previous sale of a security. For example, if a party buys an asset for £40 and sells for £40.02, the sale would be described as tight.

Title Transfer Facility (TTF)

Definition: The Dutch equivalent of the National Balancing Point (NBP).

Torness Nuclear Power Station

Definition: The last of the United Kingdom's second generation nuclear power plants to be commissioned. It is located approximately 30 miles east of the city of Edinburgh at Torness Point near Dunbar in East Lothian, Scotland.


Definition: The gas system operator, part of National Grid.


Abbreviation: None

Definition: The transfer of electricity at high voltage from power stations across the UK via wires on pylons to points where it can be distributed to users.

Transmission Losses

Definition: Charges for the loss of transmitting power through the wires.

Transmission Use of System (TUoS)

Definition: Charges for the use of the transmission network for transmitting power down the wires.

Transportation Capacity

Definition: The capacity of the UK natural gas system, which is assessed by the National Grid in three places:
1) The entry capacity of the UK Natural Transmission System (NTS).
2) The exit capacity at the NTS offtakes.
3) Local Distribution Zone (LDZ) capacity within the LDZs.


Definition:A line, which is drawn through successive maximum price movements, i.e. through a series of two or more successively lower peaks (downtrend) or successively higher troughs (uptrend). The more instances of contact, the more the line is reinforced.


Definition: Each year, the National Grid and its Scottish equivalents are paid a Transmission Network Use of System (TNUoS) fee in order to finance the cost of maintaining and updating the UK’s electricity grid. This fee is split between generators and consumers of electricity. Customers receiving pass-through charges pay their share based on consumption during Triads. These are the three highest half-hour periods of system demand between November and February each year.


Definition: The separating of the various components of electricity production, supply, and service, in order to introduce greater elements of competition into the industry.

United Kingdom Power Exchange (UKPX)

Definition: An electronic exchange that launched electricity futures in June 2000. Now owned by APX.

Unmetered Supply (UMS)

Definition: Supply such as street lighting, where the consumption is calculated using the electrical demand of the equipment and the expected hours of operation.

Upside Volume

Definition:The total volume of all advancing issues over a given period of time.


Definition: Oil and gas exploration and production, as opposed to downstream, which refers to the areas of refining and marketing.

Utility Distribution Companies (UDC)

Definition: The entities that will continue to provide regulated services for the distribution of electricity to customers and serve customers who do not choose direct access. Regardless of where a consumer chooses to purchase power, the customer's current utility, also known as the utility distribution company, will deliver the power to the consumer's home, business, or farm.

Value-at-risk (VAR)

Definition: 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. Value-at-risk is not an estimate of the worst possible loss, but the largest likely loss. For example, a firm might estimate its VAR over ten days to be $100 million with a confidence interval of 95%. This would mean there is a one-in-twenty (5%) chance of a loss larger than $100 million in the next 10 days.


Definition: Measures the rate of change in price movements.

Volumetric Risk

Definition: The effect of fluctuations in demand for a product or service on revenue.


Definition: Weighted average cost of gas.


Definition: Unit of electrical power equivalent to one joule per second.

Wellhead Price

Definition: Price of natural gas at the wellhead.

West Texas Intermediate (WTI)

Definition: A grade of crude oil used as a benchmark in oil pricing. It is described as light because of its relatively low density and sweet because of its low sulfur content. Traded mostly on the New York Mercantile Exchange (NYMEX).


Definition: Energy supplied by one producer or marketer to another for eventual resale to consumers.

Wholesale Wheeling

Definition: The transmission of gas or electricity to bulk distributors.

Within-day Market (WDM)

Definition: The traded market for delivery on the current day.

Year Spread

Definition: The spread between two-year contracts.

Zeebrugge Hub

Definition: The Belgian equivalent of the UK National Balancing Point (NBP).