Energy Glossary

We have assembled a very extensive industry wide glossary for your free use. A lot of care and attention has been taken with regards to it's accuracy, but mistakes do happen. If you happen to spot one then please let us know.

Everything is displayed by default, but if you want to check a specific sector of the energy industry then click the sector name below and it will be sorted by that sector alphbetically for you.

Everything Carbon/Emissions Electricity Gas LNG Oil
AAR Additional Account Representative, responsible for checking transactions in an account in a national registry but unable to initiate or carry out transactions.
ACI Model A code written by ACI recommending ethical and operational principles for trading staff, covering areas such as personal conduct, controls and authorisation, and encouraging the swift settlement of contracts, and the use of master agreements and standard terms.(ACI was founded in Paris in 1955 as Association Cambiste Internationale.)
API American Petroleum Institute - represents all aspects of the U.S. petroleum and natural gas industry.
APX Amsterdam Power Exchange
APX ENDEX Netherlands exchange, separated into two companies from March 2013 - the power spot exchange APX and the gas spot, gas derivatives and power derivatives exchange ENDEX, now called ICE Endex
Arbitrage The practice of exploiting price differentials between different markets, products or locations when trading.
Argus An independent media organisation with HQ in London and world-wide offices. It publishes energy price assessments, market commentary, news, and business intelligence reports.
Back Office The part of the organisation that takes responsibility for a deal once it has been agreed, checking that all the information about the deal has been correctly captured, confirming the details of the deal with both parties, and ensuring that the contract is properly executed and paid for.
Banking Carrying forward allowances from one trading period into another.
Basel II An international banking accord that recommends standards for financial institutions in terms of minimum capital, supervision of banks, and market discipline.
Basis The price differential between different markets, products or locations.
BAU Business as usual
BDS Bid Data Sheet
Bilateral Agreement An agreement between two parties to net off payments owed between themselves.
BOD Basis of Design
Broker A party that mediates between a buyer and a seller, in return for a commission fee (normally from the seller).
C Centigrade
CCC Committee on Climate Change Advises the UK and devolved Governments on tackling and preparing for climate change.
CEER The Council of European Energy Regulators - exists to facilitate the creation of a single, competitive, efficient and sustainable EU internal energy market that works in the public interest.
CER (With ref to Ireland) The Commission for Energy Regulation is the independent body responsible for overseeing the liberalisation of Ireland's energy sector.
CFR Cost and Freight
Churn Rate Measure of the number of times a parcel of a commodity is traded and re-traded, between its initial sale by the producer and it final purchase by the purchaser. A market is said to have reached maturity when the churn rate is greater than 10 times.
CIA Central Intelligence Agency, USA – publishes a World Factbook including statistics about the energy industry, and covering most countries in the world.
CIF Cost, Insurance and Freight
CIP Carriage and Insurance Paid to (named place or destination)
Collateral Security pledged by a buyer as a guarantee of performance of a contract.
Counterparty A broker, investment bank or other securities dealer that serves as the contracting party when completing "over the counter" securities transactions.
CPD Continuing Professional Development (See www.icaew.com/en/members/cpd) Points awarded for attendance at training courses by the ICAEW.
CPM Critical Path Method – a tool for project management
CPT Carriage Paid to
Credit limit The maximum amount of credit that a party is prepared to extend to a particular counterparty.
DAF Delivery at Frontier
DAT Delivery at Terminal
DBERR The Department for Business Enterprise and Regulatory Reform in UK, where most of the responsibility of UK energy policy rests. Former DTI (Department of Department of Trade & Industry)
DDP Delivered Duty Paid (named place of destination)
DDU Delivered Duty Unpaid
DEQ Delivered Ex Quay
DES Delivered Ex Ship
Downstream The oil and gas industries are divided into two parts - upstream and downstream. The downstream sector refers to the refining of crude oil and the processing of natural gas, after it has been extracted. The downstream sector delivers to consumers through such products as petrol, aviation fuel, diesel, natural gas, and liquefied petroleum gas (LPG). Midstream operations are often included in the downstream sector.
EEX Operates a market platform for a broad range of energy and related products in Germany including power, natural gas, CO2 emission rights and coal.
EFET The European Federation of Energy Traders. Also used to refer to the various commodity trading master agreements created by EFET.
EFETnet A system for electronic data exchange based on EFET standards, which facilitates energy trading.
EFP Exchange-of-futures-for-physical. The substitution of offsetting futures market positions for an existing physical market position by a buyer and a seller.
EFS Exchange-of-futures-for-swap. The substitution of offsetting futures market positions for an existing OTC swaps position by a buyer and a seller.
EMR Electricity Market Reform - UK Government initiative to make sure the UK remains a leading destination for investment in low-carbon electricity.
EPC Energy Performance Certificate which states the energy efficiency of a home as part of Home Information Packs
EPC Engineering Procurement and Construction.
ETRM Energy trading, transaction and risk management software supporting the business processes associated with energy trading.
EU10 The 10 countries which acceded to the EU in May 2004: Czech Republic, Cyprus, Estonia, Hungary, Latvia, Lithuania, Malta, Poland, Slovakia, Slovenia.
EU15 The 15 countries which formed the EU up until May 2004: Austria, Belgium, Denmark, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, Netherlands, Portugal, Spain, Sweden, UK.
EUAA European Union Aviation Allowances
EXW Ex factory, ex works or ex warehouse.
F Fahrenheit
FAS Free alongside Ship
FCA Free Carrier
FIDIC Fédération Internationale des Ingénieurs Conseils (International Federation of Consulting Engineers)
FOB Free on Board
Four eyes principle A risk control procedure that requires two people, ideally from separate parts of the business, to cross-check key processes.
Front Office The part of the organisation that is responsible for preparing for, negotiating and capturing deals.
Futures exchange A regulated market for trading futures contracts and options in commodities and other derivative financial instruments. Futures exchanges provide a central counterparty for every trade and positions are marked-to-market every day.
G or g Giga 109 or 1,000,000,000
GCC General Conditions of Contract.
GDP Gross Domestic Product
HFO Heavy Fuel Oil
HSE Health, Safety and Executive, UK
ICAEW The Institute of Chartered Accountants in England and Wales. Professional membership organisation for over 140,000 chartered accountants worldwide. It provides qualifications and professional development, and protects the quality and integrity of the accountancy and finance profession.
ICC International Chamber of Commerce
ICIS/HEREN Large petrochemical and energy market information provider across all continents. Provides independent pricing data, analysis and consultancy for the oil, gas, liquefied natural gas, carbon and coal sectors.
ICO The Information Commissioner's Office – independent advice and guidance about data protection and freedom of information.
ICO Independent Oil and Gas Company. A non-integrated company which receives nearly all of its revenues from production at the wellhead. Usually in the exploration and production segment of the industry, with no downstream marketing or refining within their operations.
IEA International Energy Agency - an autonomous organisation which works to ensure reliable, affordable and clean energy for its 28 member countries and beyond.
IFB Invitation for Bids
IOC International Oil Company
IOGC Integrated oil and gas companies – are considered integrated if they combine upstream, midstream and downstream activities as part of their overall operations.
ISDA International Swaps and Derivatives Association.
ITB Instructions to Bidders.
JOA Joint Operating Agreement.
JVCA Joint Venture, Consortium or Association.
Kwh Kilowatt hour, equals 3,600,000 Joules.
LDC Local District Company
LOC Letter of Credit
Lower 48 Name for the 48 states in the USA all connected within the continent – Alaska and Hawaii are detached.
Mark-to-market The practice of revaluing deals every day to reflect current prices so that profits and losses are realised immediately.
Master Agreement A single over-arching contract between two parties. This means that any individual deal between those parties becomes a transaction under the terms of that single master agreement. The two main types of master agreements widely used in energy trading are provided by ISDA and EFET.
Maturity The date at which contract obligations are due.
Mega One thousand, 1,000
Micro-generation Small-scale generation of heat and electric power as an alternative to centralised suppliers from the grid. Term common among individuals and small concerns who aspire to zero or low-carbon footprints.
Middle Office The part of the organisation that is responsible for risk management, reporting and counterparty credit control.
Midstream Midstream operations are often included in the downstream sector. They take place after the initial production phase and through to the point of sale.
MOU Memorandum of Understanding
Multi-lateral clearing and settlement systems Operated by some brokers or exchanges to reduce counterparty risk by enabling all parties to net off payments due.
N2EX The name of the market which NASDAQ OMX Commodities and Nord Pool Spot operate in the UK.
N2EX Market for UK energy contracts including the UK physical power market, technical trading and clearing, a regulatory framework, and clearing procedures.
NASDAQ OMX The National Association of Securities Dealers Automated Quotation set up in 1971. Now a global electronic marketplace for the buying and selling of stock. NASDAQ OMX Commodities Europe offers cash-settled derivatives contracts in the Nordic, German, Dutch, and UK power markets with futures, forward, option, and CfD-contracts of up to six years’ duration, including contracts for days, weeks, months, quarters, and years. The reference price for the power derivatives contracts is the underlying day-ahead price as published by Nord Pool Spot (Nordics), the EEX (Germany), APX ENDEX (Netherlands), and N2EX (UK).
NCC National Contracts Commission
NEP National Energy Policy
Netting statement A statement summarising all the long and short positions held with a particular counterparty, and calculating the net position relative to that counterparty.
NOCs National Oil Companies
Nordpool (Nordics) Nord Pool Spot runs the leading power market in Europe, offering both day-ahead and intraday markets to its customers.
OPEC Organisation of the Petroleum Exporting Countries.
OT Open Tender
OTC Over-the-counter - a bilateral contract for commodities or any financial instrument agreed between two counterparties either directly or through a broker. This is trading directly between companies rather than in an exchange or futures market.
OUR Office of Utilities Regulation
PAR Primary Account Representative, one of two people responsible for the operation of an account in a national registry.
PEP Project Execution Plan
Position limits A predetermined limit on the maximum position that a company or a particular trader can take on a contract.
QA/QC Quality Assurance/Quality Control.
Reference price Some contracts (particularly long-term contracts) are indexed to prices of other commodities, particularly oil and oil products, or, in the UK, to short-term gas market prices. In such a contract a reference price is the price (or one of the prices) on which this indexation is based.
Reserve lifetime or R/P ratio Defined as the ratio of the reserves of crude oil or natural gas in units of barrels or cubic feet to the annual production in barrels per year or cubic feet per year. The units of this ratio are years and are equivalent to the number of years of production left in the reserve at the current production rate.
RFP Request for Proposal
RHI The Renewable Heat Incentive helps businesses, the public sector and non-profit organisations meet the cost of installing renewable heat technologies.
Risk Management Committee A committee typically made up of senior management, which has overall responsibility for risk management, control and compliance.
RMR Retail Market Review
SAR Secondary Account Representative - one of two people responsible for the operation of an account in a national registry.
Sarbanes-Oxley The Sarbanes-Oxley Act (2002) is a piece of US legislation, passed after the Enron collapse, requiring US public companies to maintain high standards of internal control and record-keeping making the Directors personally responsible for financial reports.
SBD Standard Bidding Document
SBLC Standby Letter of Credit
SCC Special Conditions of Contract
Seasonal normal temperature The average temperature that might be expected on any particular day, based on historical data.
SND Seasonal normal demand. Forecast demand based on seasonal normal temperatures.
Spark green spread See ‘Clean spark spread’
SPE Society of Petroleum Engineers
SPV Special Purpose Vehicle
SRA Solicitor’s Regulation Authority
SSIs Standardised settlement instructions - a system used to facilitate the settlement of transfers of funds or financial instruments.
STP Straight-through processing. Functionality on computer systems designed to enable deals to be captured, confirmed, risk managed and settled automatically.
T or t Ton or Tonne. An American ton is 2,000 pounds. In non-U.S. ton is 2,240 pounds. A metric ton, or tonne, is 1,000 kilograms.
Term contract A contract negotiated between parties, typically for several or many years’ duration, as contrasted to a short-term OTC contract.
TJ Terajoule - a unit of energy = 1e12 joules
TPES Total Primary Energy Supply – net result of summing imports, exports and storage, as applied to coal, oil, gas and electricity.
Trayport Electronic trading and order matching software widely used by brokers, exchanges and traders in commodity and financial derivative markets.
UKCS UK Continental Shelf - those areas of the sea bed and subsoil beyond the territorial sea, over which the UK exercises sovereign rights of exploration and exploitation of natural resources.
Upstream Operation stages in the oil and gas industry which involve exploration and production. Upstream companies take the first steps to locate, test, drill for and extract oil and gas from the reserve.
UVDB Utility Vendor Database - EU Procurement Legislation.
VaR Value-at-Risk - a standard method for measuring the financial risk associated with any investment portfolio.