Glossary
AS Ancillary Services Services which are required for the security and stability of the
transmission system, for example reactive power, hot standby and frequency control. In England and Wales, this is a term used for the party who contracts for the
provision of ancillary services pursuant to the requirements of the transmission licence. Association of Power Exchanges Organisation set up to facilitate the exchange of information and ideas, and the
sharing of concerns held over the operation of electricity markets world-wide. APEx members represent all operating electricity markets
in the world, in addition to a number of developing markets. Availability The generation made available to the Grid Operator. CP Capacity Payment The component of the Pool Purchase Price which is designed to provide an incentive for generating capacity to be made available. Central Electricity Generating Board (CEGB) The CEGB was dissolved as part of the liberalisation and privatisation of the electricity industry in the country. Previous to this time, the CEGB held responsibility for electricity generation and transmission to the Regional Electricity Boards. Chief Executive's Office (CEO) For information about the Chief Executive's Office of the Electricity Pool of England and Wales, refer to the description of PEC. Combined Cycle Gas Turbine (CCGT) Plant This plant consists of a gas-fired combustion turbine with the waste-gases from this turbine used to heat steam in a Heat Recovery Steam Generator (HRSG). This steam then is used to power a conventional steam turbine. This process allows much higher efficiencies to be gained then is normal through conventional steam turbine technology. The Director General of Electricity Supply is appointed by the Secretary of State under section 1 of the Electricity Act 1989. The Director General heads Offer. Franchise Market The market in which customers were bound to their Regional Electricity Company for their contract to supply electricity; this restriction being to below 1MW during the period 31 March 1990 to 30 March 1994 and below 100kW during the period 31 March 1994 to 30 March 1998. Generator A person or company producing electricity. Grid Operator The party required by the terms of the transmission licence to operate the transmission system and implement the Grid Code. GSP Grid Supply Point Point where electricity is transferred from the transmission system to the distribution system of a Regional Electricity Company or to other users. Interconnector The electric lines and electrical plant and meters owned or operated by NGC for the transfer of electricity to or from the transmission system into or out of England and Wales. Loss of Load Probability (LOLP) Loss of Load Probability is used in the establishment of the Capacity Payment. LOLP is calculated through the comparison of total declared availability with forecast demand. The total declared availability figure used, in this case, is taken as the maximum of the aggregated bids, on-the-day, for the day of trading and for the previous seven days. Merit Order Ranking in order of which generation plant should be used, based on ascending order of price together with amount of electricity that will be generated. The National Grid Company, the major part of what is now the National Grid Group of
companies, is the owner and operator of the High Voltage national grid in England and Wales. The Office of Electricity Regulation is an independent body established by the Government under the Electricity Act 1989 to regulate the industry. It is headed by the Director General of Electricity Supply. It is funded by license fees and its main duties are to promote competition in the electricity industry and to promote customer's interests. The Pool is the term used to represent the organisation of the trading parties in the Wholesale market The operation of the market is administered by PEC and its sub-committees. Trading members of the Pool are represented on PEC by elected representatives. The Pool acts as the power exchange in this market. Pool Executive Committee (PEC) The Pool Executive Committee (PEC) was established by the Pooling and Settlement Agreement (P&SA) as the executive body for the administration of the market (as defined in the P&SA). It is also the body that is empowered to make changes to the P&SA itself, subject to Pool Member agreement. PEC has created a Chief Executive's Office which is empowered to carry out the administration of the market, and to complete development tasks, as prescribed by PEC. PFA Pool Funds Administrator The party, who administers the banking, billing and associated systems whereby payments under the Pool trading arrangements are made. This is the price (£/MWh) awarded by the Pool for electricity generated by Generators and purchased at Grid Supply Points (GSPs). This price is made up as follows: PPP = CP + System Marginal Price (SMP) PSP This is the price (£/MWh) which Suppliers pay for their electricity, sold at Grid Supply Points (GSPs) This price is made up as follows: PSP = Pool Purchase Price + Uplift. The Pooling and Settlement Agreement contains the rules for the Wholesale Market trading arrangements and the rights and obligations of Pool Members and Parties. The P&SA was established for the time of Vesting The holders of these licences, known as Public Electricity Suppliers (PESs), differ from Second Tier Suppliers in two regards: There are twelve PESs in the market area of England and Wales (the 12 Regional Electricity Companies (RECs) and there are two in Scotland (Scottish Power and Scottish Hydro-Electric). At Vesting Ownership of the 12 distribution systems was passed to these companies. STS Second tier suppliers are those that purchase from the Pool for the purposes of selling into the Second Tier Market. Note that for each of the 12 REC areas in the market area, there is one REC with a First Tier Supplier licence whilst the other eleven (and other, independent companies) can opt for second tier licences. All RECs operate with Second Tier licences outside their franchise area. SSA Settlement System Administrator The party who administers the computerised system used to process the data and carry out the other procedures to calculate payments due under the pool trading rules. Supplier Person or company purchasing electricity through the Pool's trading arrangements for sale to end customers. This price is the marginal of electricity, established day-ahead in the Unconstrained Schedule through a matching of supply- and demand-side price and quantity bids in the Wholesale Market. In the market of England and Wales, the demand side bids are forecast demand (volume) and related to Value of Lost Load (VOLL) (price). This price is one component of the price paid (£/MWh) to all generators dispatched through the Pool. TLF Transmission Loss Factor Scaling factor applied to metered offtake at the Grid Supply Point to allow for losses on the transmission system. Unconstrained Schedule The half hour by half hour schedule of generating units notionally required to meet forecast demand and reserve, which is produced the day ahead of trading, ignoring transmission constraints. Uplift The difference between PSP and PPP covering reserve, constrained running, forecasting errors, ancillary services and marginal plant adjustments. Value of Lost Load is a figure (£/MWh) established at Vesting The figure reflects a demand-side bid of the amount which they are willing to pay before forgoing generation. At Vesting, the figure was £2000/MWh.