Energy Glossary

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 alphbetically 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

Showing Terms and Definitions for: Carbon/Emissions

Term Definition
AAR Additional Account Representative, responsible for checking transactions in an account in a national registry but unable to initiate or carry out transactions.
AAU Assigned Amount Units
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.)
Annexe A Parties Developing Countries that have adopted the Kyoto Protocol. The intention was for Annex A countries to take on GHG emission commitments in the second and subsequent commitment periods.
Annexe B Parties Developed Countries that have adopted the Kyoto Protocol. These Annex B countries all agreed to targets for GHG emissions in the first commitment period, 2008 to 2012.
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.
Assigned Amount The amount of GHGs (in tonnes of carbon dioxide equivalent) which Annex B countries to the Kyoto Protocol are allowed to emit in the period 2008 to 2012.
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.
Bluenext Was the largest CO2 permit spot market European environmental trading exchange, but closed at the end of 2012
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).
BSA Burden-Sharing Agreement. EU directive which distributes the EU assigned amount allocated in Annex B of the Kyoto Protocol among the EU 15 countries
C Centigrade
CAA Clean Air Act - US law restricting emissions
Cap and trade A European Union system, introduced in 2005 to encourage industries to reduce emissions and invest in greener technologies by issuing permits for each ton of carbon they can emit. These can be traded, providing an incentive to cut emissions.
Carbon Dioxide (CO2) Emissions Usually recorded in Million Metric Tons (Mt) of CO₂
Carbon Price Floor A Government levy designed to make companies pay to emit carbon dioxide.
CC and CCS Carbon Capture and Carbon Capture and Storage. Trapping and separating the CO2 from major sources such as the flue gases of coal-fired power stations, and storing it in a potentially harmless way.
CCC Committee on Climate Change Advises the UK and devolved Governments on tackling and preparing for climate change.
CCL Climate Change Levy is a tax on certain energy products for use as fuels for lighting, heating and power, applied to some business consumers. It does not apply to domestic consumers.
CCS Carbon Capture and Storage (also Sequestration)
CCX Chicago Climate Exchange
CDM The Clean Development Mechanism allows a country with an emission-reduction or emission-limitation commitment under the Kyoto Protocol to implement an emission- reduction project in developing countries. Such projects can earn saleable certified emission reduction (CER) credits, which can be counted towards meeting Kyoto targets.
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 Certified Emission Reductions are a type of emissions unit (or carbon credit) issued by the Clean Development Mechanism (CDM) Executive Board.
CER (With ref to Ireland) The Commission for Energy Regulation is the independent body responsible for overseeing the liberalisation of Ireland's energy sector.
CER-EUA Spread The CER-EUA spread is the premium between Certified Emissions Reductions (CERs) arising from the Clean Development Mechanism (CDM) under the Kyoto Protocol, and European Union Allowances (EUAs) traded on the EU Emissions Trading Scheme (EU ETS)
CERUPT Certified Emissions Reduction Unit Procurement Tender - Netherlands government body set up to acquire CER’s through CDM projects.
CfD Mechanism and Fit Contract for Difference (CfD) with Feed-in Tariff (FiT) is the new mechanism introduced by the UK Government to promote investment in low carbon generation. It is replaces the Renewables Obligation (RO).
CFR Cost and Freight
CH4 Methane gas
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)
CITL The Community Independent Transaction Log
CITL The Community Independent Transaction Log is a central log, run by the European Commission, which checks and records all transactions taking place within the EU emission trading scheme (ETS).
Clean dark spread The profit margin for coal-fired power based on coal, carbon and electricity prices
Clean spark spread (or 'spark green spread') Represents the net revenue a generator makes from selling power, having bought gas and the required number of carbon allowances.
CLF Carbon Leakage Factor - where businesses transfer production to other countries which have lower constraints on greenhouse gas emissions, in order to save money.
CO2 Carbon Dioxide
Collateral Security pledged by a buyer as a guarantee of performance of a contract.
Cops Conference of Parties. Annual meetings of the UNFCCC signatories – 195 states – most of the world’s countries
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 Points awarded for attendance at training courses by the ICAEW.
CPM Critical Path Method – a tool for project management
CPT Carriage Paid to
CRC Scheme Carbon Reduction Commitment scheme for large energy users not covered by the EU ETS
Credit limit The maximum amount of credit that a party is prepared to extend to a particular counterparty.
DAF Delivery at Frontier
Dark green spark spread The net revenue a coal-fired generator makes from selling power, having bought coal and the required number of carbon allowances.
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
Durban Cop 17 The 17th Conference of the Parties (COP17) to the United Nations Framework Convention on Climate Change (UNFCCC) for the Kyoto Protocol. Held in Durban, South Africa in winter 2011.
EA Emission Allowances
EA European Co-operation for Accreditation
EC Emission Credits
ECX Formerly European Climate Exchange, now ICE Futures Europe.
EEA European Environmental Agency
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.
EEX European Energy Exchange
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.
EIT Economy in transition. Refers to the non-OECD countries in Annex B, such as Russia, other FSU countries and former Comecon Bloc countries in eastern Europe
EMR Electricity Market Reform - UK Government initiative to make sure the UK remains a leading destination for investment in low-carbon electricity.
EMU’s Emission Reduction Units
EPC Energy Performance Certificate which states the energy efficiency of a home as part of Home Information Packs
EPC Engineering Procurement and Construction.
ER Emission Reductions
ERPA Emissions Reduction Purchase Agreement.
ERUPT Emissions Reduction Unit Procurement Tender: Netherlands government body set up to acquire ERUs through Joint Implementation projects.
ERU’s Emission Reduction Units.
ETRM Energy trading, transaction and risk management software supporting the business processes associated with energy trading.
ETS Emissions Trading Scheme. This is one of the main and most prominent measures introduced by the EU to reduce its greenhouse gas emissions and reach its target under the Kyoto Protocol.
EU ETS The European Union Emissions Trading Scheme is the largest multi-country, multi-sector greenhouse gas emissions trading system in the world.
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.
EUA EU allowance: gives the holder the right to emit 1 tonne of carbon dioxide equivalent.
EUA-CER Spread The EUA-CER spread is the premium between Certified Emissions Reductions (CERs) arising from the Clean Development Mechanism (CDM) under the Kyoto Protocol, and European Union Allowances (EUAs) traded on the EU Emissions Trading Scheme (EU ETS).
EUAA European Union Aviation Allowances
EXAA Energy Exchange Austria
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)
FiT Feed-in Tariff (FiT) with Contract for Difference (CfD) is the new mechanism introduced by the UK Government to promote investment in low carbon generation. It replaces the Renewables Obligation (RO).
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
GEF Global Environmental Facility set up by the UNFCCC as the fund-holding agency to promote climate-related projects in developing countries.
GERT Greenhouse Gas Emissions Reduction Trading - trading scheme in Canada set up in 1998.
GHG’s Greenhouse gases. A group of six gases, including carbon dioxide, methane and nitrous oxide.
Global Carbon Cycle From the geological history of the Earth, carbon has been cycling among large reservoirs in the land (including plants and fossil fuels), oceans, and the atmosphere. This natural cycling of CO2 usually takes millions of years to move large amounts from one system to another.
Green Deal and ECO A financing mechanism that lets people pay for energy- efficiency improvements through savings on their energy bills. It was launched in January 2013 and applies to both the domestic and non-domestic sector. It replaces current policies such as the Carbon Emissions Reduction Target (CERT) and the Community Energy Saving Programme (CESP).
Green premium Theory that Tenants and Investors willing to pay more for energy efficient buildings.
GreenX Changed to NYMEX from Aug 2012.
GtC Giga tonnes carbon
GWP Global Warming Potential. Measures the ability of a GHG to retain heat in the atmosphere, relative to carbon dioxide.
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
ICE Futures Europe Established in 1981 as the International Petroleum Exchange of London (IPE), and acquired by ICE in 2001, ICE Futures Europe offers benchmark energy and emissions futures and options contracts cleared by ICE Clear Europe.
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.
IEA International Energy Agency - an autonomous organisation which works to ensure reliable, affordable and clean energy for its 28 member countries and beyond.
IETA International Emissions Trading Association.
IFB Invitation for Bids
IPCC Intergovernmental Panel on Climate Change.
IPE International Petroleum Exchange, based in London - see ICE Futures.
ISDA International Swaps and Derivatives Association.
ITB Instructions to Bidders.
ITL International Transaction Log, the central UN registry which will monitor and verify all transactions carried out by Kyoto Protocol Parties.
JI Joint Implementation, one of the flexible mechanisms of the Kyoto Protocol.
JOA Joint Operating Agreement.
JVCA Joint Venture, Consortium or Association.
KP Kyoto Protocol
Kwh Kilowatt hour, equals 3,600,000 Joules.
Kyoto Protocol (KP) This represents a commitment by developed countries to reducing global atmospheric concentrations of greenhouse gases. It was adopted by consensus at the Third Conference of the Parties (COP3) in December 1997. The first phase lasted from 2008 to 2012, and the second phase, 2013 to 2020 was agreed in 2012 when the Doha Amendment to the Kyoto Protocol was adopted. Those countries that adopted the Kyoto Protocol are grouped as Annex A (developing) and Annex B (developed) countries. Annex B countries all agreed to targets for GHG emissions in the first commitment period, 2008 to 2012.
LCER Long-term Certified Emission Reduction Unit - temporary credit issued by the CDM registry for land use, land-use change and forestry projects; valid up to 30 years but must be re-verified every 5 years.
LCPD Large Combustion Plant Directive, relating to industrial emissions.
LDC Local District Company
LDCF Least Developed Countries’ Fund (administered by the) to assist the 50 poorest countries most vulnerable to the effects of climate change.
LEBA London Energy Brokers Association
LEC Levy Exemption Certificate (for renewables) - issued by Ofgem for renewable generation, and can be used by electricity suppliers to claim exemption from Climate Change Levy on certain supplies.
LOC Letter of Credit
Lower 48 Name for the 48 states in the USA all connected within the continent – Alaska and Hawaii are detached.
LULUCF Land use, land-use change and forestry, term used in the Kyoto Protocol and following Cop reports to describe projects which absorb or release CO2 through changes in forestation and agriculture.
MAC Marginal abatement cost
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.
Mnt Million metric tonnes
Mop Meeting of the Parties to the Kyoto Protocol - those countries who have ratified the treaty. First meeting to took place in December 2005
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.
NAPS National Allocation Plan
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
NER New Entry Reserve - a pool of allowances set aside by EU Member States for allocation to new installations which come under the EU ETS.
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.
NIM National Implementation Measure
Nordpool (Nordics) Nord Pool Spot runs the leading power market in Europe, offering both day-ahead and intraday markets to its customers.
NOx Nitrous oxide, a pollutant emitted by burning hydrocarbons
NYMEX The New York Mercantile Exchange
OECD Organisation for Economic Co-operation and Development promotes policies that will improve the economic and social well-being of people around the world.
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.
PCF Prototype Carbon Fund, set up by the World Bank to fund CDM and JI projects.
PEP Project Execution Plan
PERT Pilot Emissions Reduction Trading: pilot trading scheme in Canada set up in 1997.
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.
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
RMU Removal Unit - allowance trading unit issued by Annex B Parties for land use, land-use change and forestry activities.
RO Renewables Obligation
Rocs Renewables Obligation Certificates
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
SCCF Special Climate Change Fund (administered by the UNFCCC) to support projects which mitigate the effects of climate change.
SCERFA Standard CER Forward Agreement
Seasonal normal temperature The average temperature that might be expected on any particular day, based on historical data.
Sequestration Carbon Capture and Storage (also CCS)
SND Seasonal normal demand. Forecast demand based on seasonal normal temperatures.
Solar FiT’s Feed-In Tariff schemes pay individuals for the electricity they generate, even if they use it themselves, and for any surplus electricity they export to the grid.
Spark green spread See ‘Clean spark spread’
Spark green spread See ‘Clean spark spread’
Spark Spread Power generator’s margin, i.e. the difference between the electricity price and the generator’s cost of fuel.
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.
Stern Review -The Economics of Climate Change 2006 study which identified climate change as a serious global threat, which needed an urgent global solution. Led to Emissions Trading and Kyoto conferences.
STL Supplementary Transaction Log
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.
TAR Third assessment Report of the IPCC published in 2001.
tCER Temporary Certified Emission Reduction Unit - temporary credit issued by the CDM registry for land use, land-use change and forestry projects. valid only for the commitment period in which they are issued.
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.
UK ETS UK Emissions Trading Scheme, a voluntary scheme set up in 2002 which ended in 2006 and was replaced by the EU ETS.
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.
UN Cop 17 Seventeenth session of the United Nations Framework Convention on Climate Change (UNFCCC) Conference of the Parties (COP 17), held in November 2011.
UNEP United Nations Environment Programme.
UNFCCC United Nations Framework Convention on Climate Change.
UVDB Utility Vendor Database - EU Procurement Legislation.
VaR Value-at-Risk - a standard method for measuring the financial risk associated with any investment portfolio.
VER Verified Emissions Reduction Unit - issued as a result of voluntary action to reduce pollution, not currently recognised under the Kyoto Protocol.