Glossary

The 102 terms of art the book defines, each with a one-line definition and the sentence it is defined in. For a word the book merely mentions, like polyphase or Niagara, search the chapters instead.

102 of 102 terms

adder: The amount added to the energy price to reflect how close the system is to running short. A fraction of the value of lost load.What actually gets added to the price in any given interval is a fraction of that number, and is called the adder.Chapter 12: Scarcity and the Missing Money →
ancillary services: The capabilities a system buys to keep itself stable, as distinct from the energy it buys to serve demand.Batteries went first to ancillary services, the products a system buys to keep itself stable rather than to supply energy, which paid best, saturated those markets within about three years, and moved to arbitrage as the returns compressed.Chapter 5: Storage and Firming →
around the clock7x24, ATC, baseload block: Every hour of every day, written 7x24. What a baseload plant sells.The three standard American time block products are on-peak, conventionally sixteen hours a day (usually 7am to 11pm) across five weekdays excluding the NERC holidays, and written 5x16, and around the clock, written 7x24, with an off-peak block making up the difference.Chapter 24: Instruments and Hedging →
Base Residual AuctionBRA: PJM's forward capacity auction, held about three years ahead. Residual because it buys only what utilities have not already self-supplied or contracted.PJM calls that auction the Base Residual Auction, which is the name attached to the numbers below.Chapter 16: How Capacity Is Paid For →
basis risk: The risk that the price where you actually settle differs from the price your contract references.That exposure is called basis risk, and it has damaged more renewable projects than construction cost overruns, and it exists because Chapter 3 is true: the wires have limits.Chapter 10: Why Prices Are Locational →
behind the meter: On the customer's side of the meter, so invisible to the wholesale market. Rooftop solar appears as demand that failed to arrive.A household array is behind the meter, so it never offers into the auction and never appears in the merit order.Chapter 20: Asia-Pacific →
Black start: Restarting the grid from a complete shutdown, using the few units that can start without any outside power.Black start — Restarts the grid from nothing — Hours to days, once a generation — Bilateral contract. No market anywhereChapter 13: Ancillary Services →
bring-your-own-generationBYOG: A large customer arriving with its own generation attached, rather than buying from the grid. The same cost-allocation question as co-location in a different wrapper.The regulatory answer followed in December 2025, when the commission directed PJM to write proper rules for co-location, creating defined service options rather than case-by-case adjudication, with further compliance orders on bring-your-own-generation arrangements through 2026.Chapter 25: Data Centres →
bus: An electrical junction in a substation, and a literal bar of metal that lines, transformers and generators bolt onto.A bus is an electrical junction, and the bar is a literal one: a strip of copper or aluminium inside a substation that lines, transformers, generators and loads all bolt onto.Chapter 10: Why Prices Are Locational →
cannibalisation: Build more of one technology in one place and it all generates at once, so it all depresses the price it receives.This is cannibalisation, and it is why two solar projects with identical output can have very different revenues.Chapter 11: When the Price Goes Negative →
Capacity accreditation: How much a resource counts towards meeting peak demand, which is usually far less than its nameplate rating.A device sized to cover it is sized for the problem the system has most nights. Capacity accreditation is the second.Chapter 5: Storage and Firming →
Capacity factor: The share of the year a plant spends at full output. It measures how a plant is used rather than how good it is.Capacity factor — Share of the year spent at full output — What kind of business it is, since a plant running 13% of the year and one running 64% are not the same tradeChapter 4: Generation Technologies →
capacity market: A market that pays generators to be available, separately from paying them for the energy they produce.It has a set of them, and it chooses between them every interval: frequency regulation, contingency reserves, energy arbitrage, and capacity payments where a capacity market, which pays generators simply to be available, exists.Chapter 5: Storage and Firming →
capture rate: The average price a generator actually receives, against the average price on the system. Also called the value factor.That gap is the capture rate, or value factor, and it falls as more of the same technology is built nearby.Chapter 11: When the Price Goes Negative →
carbon border adjustment mechanismCBAM: A charge on the carbon embedded in imports, so that a domestic carbon price does not simply move production abroad.It explains the European carbon border adjustment mechanism, which charges the embedded carbon in imported aluminium and steel so that the exemption does not have to last forever.Chapter 21: Where Power Is Cheap →
co-locationco-located, colocation: Siting a large load next to a power station and connecting it directly, so it takes power without crossing the transmission system.The regulatory answer followed in December 2025, when the commission directed PJM to write proper rules for co-location, creating defined service options rather than case-by-case adjudication, with further compliance orders on bring-your-own-generation arrangements through 2026.Chapter 25: Data Centres →
congestion rent: The surplus a grid operator collects when a constraint makes load pay more than generation receives.That surplus is congestion rent, and it can be very large.Chapter 10: Why Prices Are Locational →
connect-and-manageconnect and manage: Letting a generator connect quickly on the understanding that it will sometimes be curtailed, rather than making it wait for the network reinforcement its connection would otherwise require first.And it connects generation quickly, using an approach closer to connect-and-manage than the study-everything queues that have accumulated multi-year backlogs in most other American markets.Chapter 18: ERCOT →
contract for differenceCfD: A contract paying a generator the gap up to an agreed strike price, and taking back the excess when the market pays more.The reformed electricity market design was agreed at the end of 2023, adopted in May 2024 and in force from July 2024, and its centrepiece is the two-way contract for difference.Chapter 19: Europe →
copper plate: The false assumption that the grid has unlimited capacity, so that any generator could serve any load.A market that treated the grid as a single point, where any generator could serve any load, would be assuming what engineers call a copper plate.Chapter 10: Why Prices Are Locational →
curtailment: Deliberately reducing a generator's output, either on the grid operator's instruction or because running is not worth it.The second is curtailment.Chapter 11: When the Price Goes Negative →
dark spread: What is left of the power price after paying for the coal to make it. The coal version of the spark spread.The coal equivalent is the dark spread.Chapter 23: The Spark Spread →
degree day contractweather derivative, weather derivatives: A weather derivative settling against accumulated heating or cooling degree days at a named station. It hedges QUANTITY rather than price, which is what a retailer needs when a mild winter leaves it long energy nobody wants.A degree day contract pays out in exactly that case, which makes it a hedge on quantity in a market where quantity is decided by weather.Chapter 24: Instruments and Hedging →
degree daysHDD, CDD: How far the average temperature sits from a reference point, accumulated across a season. The standard measure of weather-driven demand.The industry measures it in degree days: for each day, the difference between the average temperature and a reference point, usually 65 degrees Fahrenheit or 18 Celsius, accumulated across the heating or cooling season.Chapter 7: Load →
economic dispatch: Deciding, minute to minute, how much each already-running unit should produce.The second is economic dispatch: given the units that are running, how much each should produce right now.Chapter 9: Unit Commitment and Dispatch →
effective load carrying capabilityELCC: How much extra demand a system can serve once a resource is added. The standard way of crediting a resource for reliability.Chapter 16 describes how a resource is credited for reliability using effective load carrying capability, a measure of how much extra demand a system can serve once that resource is added, and a four-hour battery scores very highly, in the range of 83 to 100% in several regions, because it covers the shortfall the system actually experiences.Chapter 5: Storage and Firming →
energisingenergisation, energize, energizing: Bringing a completed plant or line to live voltage for the first time. The last step before it can actually carry power.Developers are finding sites, constructing shells and even energising plants while they wait for permission to connect.Chapter 25: Data Centres →
energy-only market: A market that pays a generator for the electricity it produces and for nothing else.Who pays for that plant, and does an energy-only market, one that pays a generator for the electricity it produces and for nothing else, pay enough to make anyone build the next one?Chapter 12: Scarcity and the Missing Money →
excitation: The strength of the magnetic field inside a generator, and the lever by which it is told to supply or absorb reactive power.Generators do either on command, by adjusting excitation, which means changing the strength of the magnetic field inside the machine.Chapter 6: Inertia, Voltage and Grid Strength →
explicit auctionexplicit auctions: Selling cross-border transmission capacity in one auction and the energy in another, so a trader has to buy the wires before buying the power.Buying the transmission capacity in one auction and the energy in another is an explicit auction.Chapter 19: Europe →
Federal Energy Regulatory CommissionFERC, FPC: The US regulator of wholesale power and interstate transmission, created in 1977 out of the Federal Power Commission.The regulator it charged with setting just and reasonable wholesale prices was the Federal Power Commission, created in 1920 to license hydroelectric projects; in 1977 it was folded into the new Department of Energy and renamed the Federal Energy Regulatory Commission, or FERC, which is the body issuing the orders quoted throughout this book.Chapter 2: A Brief History of Electric Power →
financial transmission rightsFTR, CRR: Instruments paying their holder the price difference between two points, which is how congestion risk is hedged.In a well-formed nodal market the rent funds financial transmission rights, instruments that pay their holder the difference in price between two points.Chapter 10: Why Prices Are Locational →
firm: Present at full size, in every hour, indefinitely. The assumption every queue, capacity auction and planning study makes about a large load, and the one Chapter 25 questions.Every queue, capacity auction and planning study in this book treats a large load as firm: present at full size, at every hour, forever.Chapter 25: Data Centres →
first-ready first-served: Studying interconnection applications in groups by readiness, rather than one at a time in the order they arrived.Federal reform arrived in 2023, replacing the first-come first-served serial study process with a first-ready first-served cluster approach.Chapter 17: The United States →
functional control: The right to direct switching, schedule outages, dispatch across a network and plan its expansion, handed to an operator by owners who keep the title.Those owners hand the ISO functional control, meaning the right to direct switching, schedule outages, dispatch across the network and plan its expansion.Chapter 14: Who Dispatches →
generator step-up unitGSU: The transformer lifting a plant's output from the voltage it is made at to transmission voltage.A generator step-up unit lifts a plant’s output from the tens of kilovolts it is made at to transmission voltage.Chapter 3: The Grid →
grain-oriented electrical steelGOES: Steel rolled so its crystal grains line up, which is what lets a transformer core carry magnetism efficiently.And they need grain-oriented electrical steel, rolled and annealed so that its crystal grains line up in one direction, which is what lets a core carry magnetism the efficient way round and makes it the material Chapter 2 said iron was for.Chapter 26: Construction Bottlenecks →
grid strengthsystem strength: How firmly a point on the network holds its voltage when something changes.The current a given point on the network can push into a fault is its short-circuit level, and how firmly that point holds its voltage when something changes is what engineers mean by grid strength.Chapter 6: Inertia, Voltage and Grid Strength →
Heat rate: The fuel energy needed to make a unit of electricity. Lower is more efficient, and it sets a thermal plant's marginal cost.Heat rate — Fuel energy burned per unit of electricity produced — Marginal cost, and so the plant’s place in the dispatch orderChapter 4: Generation Technologies →
implicit auctionimplicit auctions: Allocating cross-border capacity inside the energy clearing itself, so power flows toward the expensive side automatically. Market coupling is the European version.Allocating the capacity inside the energy clearing, which is what EUPHEMIA does, is an implicit auction.Chapter 19: Europe →
implied market heat rate: The power price divided by the gas price. It states the efficiency a plant needs in order to break even.Divide the power price by the nat gas price and the result is the implied market heat rate.Chapter 23: The Spark Spread →
independent power producer (merchant fleet)independent power producer, IPP: Owns generation and no customers, so its whole commercial existence is the spread between the fuel it buys and the power price it sells into.The independent power producer (merchant fleet) owns generation and no customers.Chapter 22: The Players →
inertia: The stored rotating energy of machines spinning in step with the grid, which slows how fast frequency can move.An inverter has no rotating parts, so it has no stored motion to surrender, and that stored motion is what engineers mean by inertia.Chapter 1: Why Electricity Is Different →
interconnection queues: The waiting list for permission to connect a new plant to the grid.Capacity auctions, interconnection queues (the waiting list for permission to connect a new plant), planning reserve margins (the cushion of capacity held above expected peak demand) and transmission approval processes were all shaped by a world in which the central problem was allocating a fixed quantity of demand among competing suppliers, and in which a new power plant was replacing something rather than adding to a total.Chapter 7: Load →
Load: What the power industry calls demand.Load is what the power industry calls demand.Chapter 7: Load →
locational marginal priceLMP: The cost of serving one more megawatt-hour at a specific point, made of energy plus congestion plus losses.The price at a location, its locational marginal price, is the cost of serving one more megawatt-hour of demand at that specific point, given every constraint the system is currently respecting.Chapter 10: Why Prices Are Locational →
loop flowunscheduled flow: Power scheduled between two places physically flowing through a third, because electricity takes every parallel path.Power scheduled from Germany to Austria physically flows through Poland and the Czech Republic, which is called loop flow or unscheduled flow, and it consumes capacity on networks belonging to countries that are not party to the transaction.Chapter 3: The Grid →
loss-of-load expectationLOLE: How often a system is planned to fall short, usually set at 0.1 events a year, which is one day in ten years.Most of North America plans to a one-day-in-ten-years standard, generally implemented as a loss-of-load expectation of 0.1 events per year.Chapter 12: Scarcity and the Missing Money →
make-whole paymentsuplift: Side payments topping a unit up to its costs when following instructions left it short of what the price recovers.Because the market-clearing price cannot recover lumpy costs, grid operators pay make-whole payments, also called uplift: a side payment outside the price, calculated after the fact, that tops a unit up to its as-bid costs when following instructions left it short.Chapter 9: Unit Commitment and Dispatch →
marginal cost: The cost of producing one more megawatt-hour from a plant that already exists. Capital cost does not appear in it.The sorted list of offers is the merit order, and its shape is set by marginal cost, meaning the cost of producing one more megawatt-hour from a plant that already exists.Chapter 8: Merit Order and Marginal Cost →
Market coupling: Clearing several countries' day-ahead auctions together, allocating cross-border capacity as part of the clearing.Power flows toward the expensive zone automatically, because the algorithm allocates the cross-border capacity as part of the clearing rather than requiring anyone to buy it separately first. Market coupling replaced a system in which traders bought transmission capacity and energy in separate transactions.Chapter 19: Europe →
merchant generatormerchant plant, merchant fleet: A plant that sells its output into the wholesale market at whatever price clears, rather than into a regulated tariff. What makes an independent power producer a merchant rather than a utility.A merchant generator is the asset-owning (usually power generation capacity) counterpart, a plant that sells its output into the wholesale market at whatever price clears rather than into a regulated tariff, and it is what makes the independent power producer above a merchant rather than a utility.Chapter 22: The Players →
merit order: The stack of offers sorted from cheapest to most expensive, which is the order the operator accepts them in.The sorted list of offers is the merit order, and its shape is set by marginal cost, meaning the cost of producing one more megawatt-hour from a plant that already exists.Chapter 8: Merit Order and Marginal Cost →
Minimum run time and minimum down time: How long a unit must stay on once started, and off once stopped.Minimum run time and minimum down time — How long it must stay on once started, and off once stopped — Whether it can be started for a single tight hour at allChapter 4: Generation Technologies →
Minimum stable loadminimum load: The floor below which a unit cannot run steadily.Minimum stable load — The floor below which it cannot run steadily — How much room it occupies in the stack that it cannot vacateChapter 4: Generation Technologies →
missing market: The absence of long-term contracts that would let somebody finance a plant against revenue this volatile.So, the price level often is limited (missing money to peaker plants) and there is limited financing available for building a power plant that operates a few hours every few years (a missing market for peaker plants).Chapter 12: Scarcity and the Missing Money →
missing money: The gap between what a plant needs to earn and what the energy market pays it, once caps and interventions have done their work.So, the price level often is limited (missing money to peaker plants) and there is limited financing available for building a power plant that operates a few hours every few years (a missing market for peaker plants).Chapter 12: Scarcity and the Missing Money →
NERCNorth American Electric Reliability Corporation, Electric Reliability Organization, ERO: The non-profit that writes the mandatory reliability standards the North American grid is operated to. Certified by FERC, but not itself a government agency or a market regulator.That describes neither a winter storm which freezes nat gas wellheads and power plants at the same time, nor a system where a still evening reduces output across an entire region at once. NERC, the body that writes North American reliability standards, and others are moving toward measures that count hours and unserved energy rather than events, precisely because a metric counting events treats a two-hour shortfall and a four-day one as the same thing.Chapter 12: Scarcity and the Missing Money →
net load: Demand minus wind and solar output. What the rest of the fleet actually has to serve.Large-scale solar installations over the past two decades have meant that net load, meaning demand minus wind and solar output, resembles a duck shape when charted.Chapter 7: Load →
nodal market: A market that solves dispatch against a model of the real grid and publishes a price at every point on it.A nodal market computes that whole price, energy plus congestion plus losses, at every point where the network model has a bus.Chapter 10: Why Prices Are Locational →
obligation to serve: A utility's duty to connect and supply anybody in its territory who asks.In return it accepts an obligation to serve anybody who asks, a duty to connect, and a regulator who sets its prices and permits it a return on the capital it has prudently invested.Chapter 2: A Brief History of Electric Power →
off-peakoff peak: The hours left over once the on-peak block is taken out: nights, weekends and the NERC holidays.The three standard American time block products are on-peak, conventionally sixteen hours a day (usually 7am to 11pm) across five weekdays excluding the NERC holidays, and written 5x16, and around the clock, written 7x24, with an off-peak block making up the difference.Chapter 24: Instruments and Hedging →
Offer caps: The ceiling a grid operator sets on what a generator may bid.High enough prices to pay for peaker plants are often not available. Offer caps, the ceiling a grid operator sets on what a generator may bid, exist because a market with genuinely unbounded prices during a shortage invites both abuse and ruin.Chapter 12: Scarcity and the Missing Money →
on-peak5x16, peak block: The standard daytime block: sixteen hours a day, usually 7am to 11pm, across five weekdays but not the NERC holidays, written 5x16. What a trader hedging a daytime industrial load buys.The three standard American time block products are on-peak, conventionally sixteen hours a day (usually 7am to 11pm) across five weekdays excluding the NERC holidays, and written 5x16, and around the clock, written 7x24, with an off-peak block making up the difference.Chapter 24: Instruments and Hedging →
one-day-in-ten-years: The reliability standard most of North America plans to. Planned reliability is not perfect reliability.Most of North America plans to a one-day-in-ten-years standard, generally implemented as a loss-of-load expectation of 0.1 events per year.Chapter 12: Scarcity and the Missing Money →
open access: The rule that a transmission owner must offer competitors the same terms it gives its own generation.Orders 888 and 889 in 1996 made that access general, and are what the industry means by open access.Chapter 2: A Brief History of Electric Power →
operating reserve demand curveORDC: A formula adding to the price as reserves tighten, so scarcity is priced before anything has actually failed.Texas builds this in explicitly through an operating reserve demand curve, the most thoroughgoing attempt anywhere to make an energy-only market price scarcity on purpose rather than by accident.Chapter 12: Scarcity and the Missing Money →
ownership unbundling: Putting a transmission network into different ownership from generation and supply.In Europe an ISO is one of three permitted structures (ISO, ownership unbundling and the independent transmission operator) for separating a transmission network from the generation and supply business.Chapter 14: Who Dispatches →
peaking plantpeaker: A plant kept for the few hours when everything else is already running flat out, usually a simple cycle gas turbine.A machine run that rarely, kept on the system for the hours when everything else is already flat out, is what the trade calls a peaking plant or a peaker, and later chapters use those words.Chapter 4: Generation Technologies →
planning reserve margins: The cushion of capacity held above expected peak demand.Capacity auctions, interconnection queues (the waiting list for permission to connect a new plant), planning reserve margins (the cushion of capacity held above expected peak demand) and transmission approval processes were all shaped by a world in which the central problem was allocating a fixed quantity of demand among competing suppliers, and in which a new power plant was replacing something rather than adding to a total.Chapter 7: Load →
power factor: The share of the flow that does useful work. At 1 all of it does; the remainder is reactive power.When they peak together, every amp the wires carry is doing work and the power factor is 1.Chapter 13: Ancillary Services →
power marketermarket-based rate authority, MBR: An entity holding FERC market-based rate authority, able to sell wholesale power at negotiated prices while owning no generation and no wires. Also used loosely on a desk for the scheduling job.A power marketer is an entity holding market-based rate authority from FERC, which lets it sell wholesale power at negotiated prices rather than under a cost-of-service tariff, and which it can hold while owning no generation and no wires whatever.Chapter 22: The Players →
power purchase agreementPPA, offtake agreement: A long-term contract to buy a generator’s output at an agreed price. Physical if the electricity is actually taken; virtual if it settles as a contract for difference and no power changes hands.The power purchase agreement fills the gap.Chapter 24: Instruments and Hedging →
public utility commissionPUC, PUCT, state commission, utility commission, public service commission, PSC: The state regulator that sets retail rates and decides what a utility may build and must buy. Called a public service commission in other states, and simply the commission by anyone dealing with one.That authority is exercised by a state regulator, called a public utility commission (PUC) in some states and a public service commission (PSC) in others.Chapter 17: The United States →
Ramp rate: How fast a plant can change its output, in megawatts per minute.Ramp rate — How fast output can change, in megawatts per minute — Whether it can follow the evening ramp of Chapter 7Chapter 4: Generation Technologies →
reactive powerVAr, MVAr: The component of the flow that does no useful work but sets voltage.Voltage on an alternating current network is set by the balance of reactive power, the component of the flow that does no useful work, so equipment that pushes reactive power onto the network raises local voltage and equipment that absorbs it lowers local voltage.Chapter 3: The Grid →
redispatchredispatching: Changing a schedule the market has already set, moving plants up and down so the result can physically be delivered.That process is redispatch, and the cost is recovered through network charges rather than appearing in any publicly set market price.Chapter 15: How Location Is Priced →
regional transmission organisationRTO, ISO, independent system operator: An independent operator running the grid and the market across a region, under the status FERC defined in Order 2000.A regional transmission organisation is the status FERC defined in Order 2000, with twelve required characteristics covering regional scope, independence and authority over the network.Chapter 14: Who Dispatches →
retailer, or competitive supplierretailer, competitive supplier, supplier: Owns customers and no generation. Sells a fixed price and buys a variable one, which is a short position in power, and the participant that fails most often.The retailer, or competitive supplier, is the mirror image: customers and no generation.Chapter 22: The Players →
revenue stacking: Earning from several markets with one asset, choosing between them interval by interval.The practice of moving between these is revenue stacking, and it is why a storage business plan is a forecast about several markets at once.Chapter 5: Storage and Firming →
Round-trip efficiency: The share of the energy put into storage that comes back out again.Round-trip efficiency — Around 80% at system level — Around 80%Chapter 5: Storage and Firming →
Shape risk: The risk that a generator produces in the wrong hours, so it cannot deliver the flat block it sold.Chapter 10 gave this its due, and it has damaged more renewable projects than construction overruns. Shape risk is the second, and it is what makes hedging a wind farm harder than hedging a nat gas plant.Chapter 24: Instruments and Hedging →
shedding loadload shedding: Cutting power to customers deliberately, as the last defence once generation has run out.Cutting power to customers deliberately, which appears in the first row, is called shedding load, and it is the last defence rather than a routine tool.Chapter 1: Why Electricity Is Different →
short-circuit levelfault level: How much current a point on the network can push into a fault, which is what protection equipment needs in order to detect one.The current a given point on the network can push into a fault is its short-circuit level, and how firmly that point holds its voltage when something changes is what engineers mean by grid strength.Chapter 6: Inertia, Voltage and Grid Strength →
Small modular reactorsSMR: Reactors small enough to be built in a factory in series, rather than constructed one at a time on site.Small modular reactors (SMRs), a technology deployed in submarines and aircraft carriers for decades, are the nuclear answer everybody reaches for.Chapter 27: Nuclear and SMRs →
spark spread: What is left of the power price after paying for the gas to make it.The spark spread is the power market equivalent of the product minus crude spreads in oil, the refinery margins or crack spreads: Spark spread, in dollars per megawatt-hour, equals the power price minus the nat gas price multiplied by the heat rate expressed in million Btu per megawatt-hour.Chapter 23: The Spark Spread →
Spinning reserve: Capacity already synchronised to the grid and ready to ramp within minutes.Spinning reserve — Capacity already synchronised, ready to ramp — Minutes — MarketChapter 13: Ancillary Services →
Start cost: The fuel and wear consumed getting a plant from cold to useful output.Start cost — Fuel and wear consumed getting from cold to useful output — The side payments of Chapter 9 that no single price can expressChapter 4: Generation Technologies →
substations: The sites where high-voltage lines hand power down to local networks.The same megawatt-hour is worth different amounts at two substations, the sites where high-voltage lines hand power down to local networks, a few miles apart.Chapter 1: Why Electricity Is Different →
synchronous condensers: Generators that burn no fuel and produce no energy, spun purely to supply inertia and reactive power.The engineering answers exist and are being deployed: synchronous condensers, which are essentially generators spun up with no fuel, purely to provide inertia and reactive power, and grid-forming inverters, which impose a voltage waveform rather than following one.Chapter 6: Inertia, Voltage and Grid Strength →
tolling agreement: A contract renting out a plant's dispatch decisions, with the counterparty supplying the fuel and taking the power.A tolling agreement gives a counterparty the right to run the plant for a period in exchange for a fixed payment.Chapter 23: The Spark Spread →
transmission ownersTO, transmission owner, transco: The companies that own the lines, substations and transformers. In the US they are separate from the operator that instructs them, and are paid a regulated return for building and maintaining the network.The lines, substations and transformers belong to transmission owners: investor-owned utilities, most of them subsidiaries of listed holding companies, alongside municipal utilities, member-owned rural cooperatives, federal agencies such as the Bonneville Power Administration, and a small number of independent companies that own transmission and nothing else.Chapter 14: Who Dispatches →
transmission system operatorTSO: The European body that owns or operates the high-voltage network and balances the system, but does not run the market.A European transmission system operator, or TSO, such as RTE in France or Amprion and TenneT in Germany, owns and operates the high-voltage network, runs balancing in real time, and carries out the redispatch described in Chapter 15.Chapter 14: Who Dispatches →
two-settlement systemtwo settlement: Settling a position twice: once on what was scheduled day-ahead, then only on the difference between that and what actually happened.Under a two-settlement system, a participant is settled first on its day-ahead position at the day-ahead price, and then only on the difference between that position and what it actually did, settled at the real-time price.Chapter 9: Unit Commitment and Dispatch →
unit commitment: Deciding in advance which units will be running and available for each hour of tomorrow.The first problem is unit commitment: a set of yes-or-no decisions about which units are synchronised and available for each hour of tomorrow.Chapter 9: Unit Commitment and Dispatch →
value factor: The average price a generator actually receives, against the average price on the system. Also called the capture rate.That gap is the capture rate, or value factor, and it falls as more of the same technology is built nearby.Chapter 11: When the Price Goes Negative →
value of lost loadVOLL: What an outage costs customers, per megawatt-hour. The number scarcity pricing is anchored to.That number is the value of lost load, the cost to customers of not being served, and it is the least comfortable figure in this book, because it is an attempt to price an involuntary outage.Chapter 12: Scarcity and the Missing Money →
vertically integrated utilityvertical integration, integrated utility: One company owning generation, wires and customers inside an exclusive territory, recovering its costs through a regulated tariff. Still about a third of US load.The vertically integrated utility owns generation, wires and customers inside an exclusive territory, recovers its costs through a regulated tariff, and trades mainly to manage what it already has rather than to take positions.Chapter 22: The Players →
virtual bidsINC, DEC: Purely financial buy or sell orders in the day-ahead market, settled against the real-time price.Day-ahead — Tomorrow — Building the offer curve for the day-ahead auction, and the virtual bids, purely financial buy or sell orders that settle against the real-time price, used to arbitrage one market against the other — Day-ahead against real-time convergence, and whether the fleet cleared where it should haveChapter 22: The Players →
wattW, kW, MW, GW, TW: The unit of power, which is a rate of energy flow rather than a quantity of it.A watt is a rate rather than a quantity.Chapter 1: Why Electricity Is Different →
watt-hourWh, kWh, MWh, GWh, TWh: The unit of energy: a watt sustained for an hour. A megawatt is barrels per day, a megawatt-hour is barrels.A watt-hour is the quantity that rate delivers over time, the way a distance is what a speed delivers over time.Chapter 1: Why Electricity Is Different →
zonal marketbidding zone: A market that clears across a whole zone as though the network inside it had no limits.A zonal market draws a boundary, commonly a national border, and clears as though everything inside were a massive copper plate without line capacity constraints.Chapter 15: How Location Is Priced →