Tuesday, 30 November 2021, 3:04 PM
Site: Dark Energy Consulting
Course: Free Simple Glossary of Energy Trading terms (Simple Glossary)
Glossary: Free Simple Glossary of Energy Trading terms
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Interconnector

by Nick Henfrey - Saturday, 9 May 2015, 7:14 AM
 

A gas or power connection between two different locations

Usually used to flow gas or power from a lower priced location to a higher priced location

For much more information please refer to the Detailed Glossary

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Invoicing

by Nick Henfrey - Saturday, 9 May 2015, 7:14 AM
 

Like most businesses, we sell something, we deliver it, we raise an invoice, we send it to our buyer, we get paid - we hope.

The Master Agreement between us and our counterparty will specify if we raise an invoice for a specific delivery (of oil for example), or for a continuously delivered commodity (gas or power for example) over a period (usually a day, week or month)

For much more information please refer to the Detailed Glossary

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Line Loss

by Nick Henfrey - Saturday, 9 May 2015, 7:14 AM
 

When transmitting Electricity via Interconnector, some  of the power is lost and that's called Line Loss. For UK-FR interconnector line loss factor is 1.17%

For much more information please refer to the Detailed Glossary

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Linear trade

by Nick Henfrey - Saturday, 9 May 2015, 7:14 AM
 

A trade with no optionality

For much more information please refer to the Detailed Glossary

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Location

by Nick Henfrey - Saturday, 9 May 2015, 7:14 AM
 

Location is one of the key dimensional attributes of all physically settled, and many financially settled, trades

For much more information please refer to the Detailed Glossary

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Margining

by Nick Henfrey - Saturday, 9 May 2015, 7:14 AM
 

Margining is a form of Settlement, whereby exposure to Credit Risk between two parties is limited by keeping the overall Credit Exposure below a certain threshold by means of Margin payments between the parties whenever the threshold is breached

For much more information please refer to the Detailed Glossary

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Mark to Market

by Nick Henfrey - Saturday, 9 May 2015, 7:14 AM
 

A way of valuing the unrealized P&L of a simple linear Forward, Futures contract or Swap

For much more information please refer to the Detailed Glossary

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Market

by Nick Henfrey - Saturday, 9 May 2015, 7:14 AM
 

In Energy Trading a Market describes a standardized trading environment for a commodity and a geographic zone

The geographic zone is not necessarily the delivery location, but usually determines the valuation of the traded commodity

For example API#2 is a market based on the published index for coal in the Amsterdam, Rotterdam and Antwerp (ARA) location; a trade may deliver coal to a port in France but still be part of the API#2 market

For much more information please refer to the Detailed Glossary

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Market Maker

by Nick Henfrey - Saturday, 9 May 2015, 7:14 AM
 

A market maker quotes prices at which they are prepared to buy or sell a commodity - usually on an Exchange or with a broker

For much more information please refer to the Detailed Glossary

nick

Master Agreement

by Nick Henfrey - Saturday, 9 May 2015, 7:14 AM
 

When two parties execute a trade between themselves they specify the terms of the trade: Price, Volume, Location, timing etc.

But in order to successfully manage the trade's delivery and settlement a lot more information needs to be available than is captured in the trade details, such as when payment is due, who needs to notify a TSO etc.

This additional detail is held in a Master Agreement

Each trade that is executed is regulated by a Master Agreement

For much more information please refer to the Detailed Glossary