| Absolute Volatility Index (IVA) |
| index of absolute volatility of Prices. It measures the variability of the phenomenon in a period of time in absolute terms, i.e. in €/MWh. With reference to one month, the IVA is calculated as the weighted average of the standard deviations of Prices in each of the 24 hours (or Applicable period) of a working day and of a holiday. For longer periods of time (quarter, half-year, year), the index is calculated as the weighted average of the volatility indexes in the months of the period. |
| Ancillary Services Market (MSD) |
| venue for the trading of supply offers and demand bids in respect of ancillary services. Terna S.p.A. uses this market to acquire resources for relieving intrazonal congestion, procuring Reserve Capacity and Balancing injections and withdrawals in real time. Participation in the MSD is restricted to units that are authorised to supply ancillary services and to their Dispatching Users. Participation in the MSD is mandatory. The MSD produces two separate results: 1) the first result (Ex-Ante MSD) concerns Offers/Bids that Terna S.p.A. has accepted on a scheduled basis for relieving congestion and creating an adequate Reserve margin; 2) the second result (ex-post MSD) concerns Offers/Bids that Terna S.p.A. has accepted in real time for Balancing injections and withdrawals (by sending Balancing commands). Offers/Bids accepted in the MSD determine the final Injection and Withdrawal Schedules of each Offer Point. In the MSD, Offers/Bids are accepted by economic Merit Order, taking into account the need for ensuring the correct operation of the system. Offer/bids accepted in the MSD are valued at the offered price (Pay as bid). |
| Applicable period |
| period of time taken as a reference for the individual offer/bid submitted into the Electricity Market. |
| Autorità per l’Energia Elettrica e il Gas (AEEG - Electricity & Gas Regulator) |
| independent Regulator established by Law no. 481 of 14 November 1995 with the task of guaranteeing the promotion of competition and efficiency in the electricity & gas sectors. With regard to GME’s activity, AEEG is responsible, among others, for defining rules for Merit-Order Dispatch and market power control mechanisms. |
| Balancing |
| service that Terna S.p.A. provides as part of its dispatching service. The balancing service consists in giving dispatching commands in order to maintain in real time: i) the equilibrium between injections and withdrawals into/from the national power system; and ii) adequate Margins of secondary Reserve Capacity, taking into account the physical limits of the system. To this end, Terna S.p.A. purchases the related services in the Ancillary Services Market (MSD). |
| Balancing Charges (also “Unbalancing charges”) |
| charges paid by parties injecting or withdrawing electricity into/from the grid (Dispatching Users) when they deviate from Injection or Withdrawal Schedules. |
| Balancing Market (MB) |
| The MB takes place in different sessions, during which Terna selects Offers/Bids in respect of groups of hours of the same day on which the related MB Session takes place. At present, the MB consists of 5 sessions. The first Session of the MB takes into consideration the Offers/Bids that Participants have submitted in the previous MSD Session. For the other sessions of the MB all the sittings for offer/bid submission open at 11:00 p.m. of the day before the day of delivery (and anyway not before the results of the previous Session of the Ex-Ante MSD are made known) and close one hour and a half before the first hour which may be negotiated in each Session. In the MB Terna accepts energy demand bids and supply offers in order to provide its service of secondary control and balance energy injections and withdrawals into/from the grid in real time. |
| Captive Customers |
| until 30 June 2007, final customers allowed or opting to contract for electricity only with their local distributor. |
| CIP-6 |
| resolution no. 6 adopted in 1992 by Comitato Interministeriale Prezzi (CIP - Interministerial Committee on Prices). The resolution incentivises construction of plants for generation of electricity from renewable and/or so-called “assimilated” sources, as per Law 9/91. GSE purchases the electricity generated by such plants under art. 3.12 of Legislative Decree 79/99, and sells it in the Power Exchange under art. 3.13 thereof. CIP-6 electricity has Dispatching Priority, in accordance with art. 3.12 of Legislative Decree 79/99. In the years elapsing from the approval of Legislative Decree 79/99 to the start of the Power Exchange, GSE sold such electricity to final customers by selling yearly and monthly electricity bands (similar to Bilateral Contracts). From 1 January 2005, GSE offers CIP-6 electricity directly in the Power Exchange: Market Participants with CIP-6 allocations are required to enter into a Contract for Differences with GSE, under which they undertake to procure the Volumes of electricity corresponding to their allocations in the Electricity Market. |
| Co-generation (or Combined Heat & Power Generation or CHP Generation) |
| combined generation of electricity and heat. Electricity generated by co-generating plants benefits from Dispatching Priority under art. 3.3 of Legislative Decree 79/99. |
| Constrained Zone (“Point of limited production”) |
| set of generating units connected to one portion of the National Transmission Grid without Withdrawal Points and whose maximum generation exportable to the rest of the grid is lower than the maximum possible generation owing to insufficient Transmission capacity. |
| Contract Covering the Risk of Volatility of the Fee for Assignment of Rights of Use of Transmission Capacity (CCC) |
| financial contract signed between Terna and a Dispatching User and covering the risk of volatility of the Fee for Assignment of Rights of Use of Transmission Capacity (CCT) pertaining to national transits. Terna awards the contract through yearly and monthly auctions. Under the contract, the Dispatching User pays Terna a fixed price in exchange for the return of the value of the CCT. The matter is covered by AEEG’s Decision 224/04, as amended. |
| Contract Types |
The types of contracts tradable in the Forward Electricity Market (MTE) are:
- Base-Load, whose underlying is electricity to be delivered in all the applicable periods of the days belonging to the delivery period;
- Peak-Load, whose underlying is electricity to be delivered in the applicable periods from the ninth to the twentieth of the days belonging to the Delivery period, excluding Saturdays and Sundays;
- Off-Peak, whose underlying is electricity to be delivered in the applicable periods from the first to the eighth and from the twenty-first to the twenty-fourth of the days belonging to the Delivery period, excluding Saturdays and Sundays, and in all the applicable periods of the Saturdays and Sundays belonging to the Delivery period. |
| Cumulated Average Price of Green Certificates |
| average price of Green Certificates having the same reference year; this price is weighted for the Volumes traded in GME’s regulated market, considering all the sessions in which such Green Certificates have been sold. The price is monthly updated. |
| Delivery period |
| Period during which the electricity underlying Forward Contracts is injected/withdrawn. |
| Demand Curve |
| segment of line on the quantity-unit price plane, which refers to an Applicable period and which is obtained by cumulating Offers/Bids after checking their validity and ranking them by non-increasing unit price order, beginning with non-price-dependent Offers/Bids. |
| Demand-Side Bilaterals Adjustment Platform (PAB) |
| IT platform operational from 31 December 2004. PAB registers balanced hourly trades of electricity between participants that manage Withdrawal Points belonging to the same Geographical Zone, as provided for in the PAB Rules. GME monitors compliance with the PAB Rules and with the PAB Technical Rules so as to ensure the regular functioning of PAB under criteria of neutrality, transparency, objectivity and competition between participants. The trades of electricity that are notified to GME via the PAB platform, together with the commitments arising from Bilateral Contracts or from purchases in the Electricity Market, determine the binding schedules of each Withdrawal Point. |
| Deviation from Schedule (also “Planned Deviation” or “On-Schedule Deviation”) |
| difference between Injection and Withdrawal Schedules pertaining to a Bilateral Contract. As per art. 17 of AEEG’s decision 168/03, GME considers such volume as a demand bid/supply offer submitted into the market. GME assigns such volume to a Bilateral Contract holder, if such holder is a Market Participant and has submitted an appropriate application. Otherwise, such volume is assigned to Terna S.p.A.. |
| Deviations/Imbalances (also “Unbalancing”) |
| deviations/differences between actual Injections/Withdrawals and final Injection/Withdrawal Schedules of a generating/consuming unit. Balancing Charges are applied to such quantities. |
| Dispatching Contract |
| contract made between each Dispatching User and Terna S.p.A. for the provision of the dispatching service and for the Settlement the resulting payables and receivables. The parties that are required to enter into dispatching service contracts with the Transmission system operator are: owners of generating units, owners of consuming units (except for those included in the captive market) and AU (for the consuming units included in the captive market). |
| Dispatching Priority |
| offered price remaining equal, priority in the Economic Merit Order by which Offers/Bids are ranked for Market Resolution. As specified in AEEG’s Decisions 168/03 and 48/04, this priority is sequentially applied to: Offers/Bids in respect of must-run units; Offers/Bids in respect of non-schedulable RES-E units; Offers/Bids in respect of schedulable RES-E units; Offers/Bids in respect of co-generating units; Offers/Bids in respect of CIP-6 units; supply offers in respect of generating units which are only fed by national primary fuel sources, for a maximum yearly amount not exceeding fifteen per cent of all the primary energy required to generate the electricity to be consumed; and Offers/Bids related to Bilateral Contracts. Priority of dispatching does not mean guaranteed dispatching. |
| Electricity & Gas Regulator |
| – see AEEG. |
| Eligible Customer |
| natural or legal person entitled to choose its own supplier of electricity (producer, distributor, Wholesaler). Under AEEG’s Decision 107/04, from 1 July 2004, all natural or legal persons not buying electricity for their own household use, including producers and wholesale customers, are eligible customers. From 1 July 2007, all customers are eligible. From 1 January 2005, eligible customers are entitled to directly purchase electricity in the Power Exchange. |
| Energy Efficiency Certificates (or White Certificates; TEE) |
| White Certificates established by the Decrees issued by the Ministry of Productive Activities, jointly with the Ministry of Environment and Land Protection, on 20 July 2004 (Ministerial Decree 20/7/04). They give evidence of energy savings that electricity and gas distributors with over 50,000 customers are required to achieve. Energy Efficiency Certificates, which are issued by GME, are valid for five years starting from the year of reference. |
| European Average Price (PME) |
| indicator of the average electricity Wholesale price in continental Europe. It is calculated as the average of the Prices quoted on Powernext, EXAA and EEX, weighted for the Volumes traded in the individual exchanges. |
| Ex-Ante MSD |
| The ex-ante MSD takes place in a single Session on the day before the day of delivery. The Sitting for offer/bid submission into the ex-ante MSD opens at 3:30 p.m. of the day before the day of delivery and closes at 5:00 p.m. of the day before the day of delivery. The results of the ex-ante MSD are made known within 9:00 p.m. of the day before the day of delivery. In the ex-ante MSD, Terna accepts energy demand bids and supply offers in order to procure Reserve, relieve congestions and balance energy injections and withdrawals into/from the grid. |
| Fee for Assignment of Rights of Use of Transmission Capacity (CCT) |
hourly fee, as defined in art. 43 of AEEG’s Decision 111/06 (as subsequently amended and supplemented). For Injection Schedules and Withdrawal Schedules (only if the Withdrawal Schedules refer to Mixed Points or Withdrawal Points belonging to neighbouring countries’ Virtual Zones) registered in accordance with the PCE Rules, this fee is equal, for each hour, to the product between: 1) the difference between the National Single Price and the Zonal Price of the Zone where the dispatching points are located; 2) the forward electricity account schedule resulting from the Day-Ahead Market (MGP).
Both in the MGP and in the MI, the fee for GME in each hour is equal to the difference between the purchasing value and the selling value of Power Exchange Volumes. |
| Forward Contract |
| Contract admitted to trading in the Electricity Market and covering future supplies of electricity. |
| Forward Electricity Account Trading Platform (PCE) |
| electronic platform for registering Bilateral Contracts. The PCE introduces significant elements of flexibility with respect to the Bilaterals Platform used previously. The operation of the PCE is covered by AEEG’s Decision 111/06 and by the relevant Rules issued by GME. Five types of contracts may be registered on the PCE: four contracts of standard type (base-load, peak-load, off-peak, week-end) and one contract of non-standard type. Market Participants may register data concerning the Volumes and delivery duration of their Forward Contracts up to two months in advance of the date of physical delivery. In general, each Market Participant owns one or more electricity injection accounts (CEI) and one or more electricity withdrawal accounts (CEP). The Market Participant may register purchases and sales on each of such accounts, provided that the net balance resulting from the new registration is a net sale (injection account) and a net purchase (withdrawal account). The registration of purchases and sales, which modify the net position of each Market Participant on each account, are allowed up to two days before the start of the corresponding physical delivery. Therefore, each contract may be registered 60 to 2 days in advance of the delivery. The balance of the account defines the volume of electricity that may be delivered/withdrawn or sold/purchased in the MGP or combinations thereof. By definition, the injection/withdrawal schedules must be equal to or at the most lower than the balance: a schedule lower than the balance (the so-called Balance of PCE Schedules) represents a repurchase at the National Single Price (PUN) in the MGP, in the case of an injection account, and a sale at the PUN in the MGP, in the case of a withdrawal account. This means that, in each hour, there may be scheduled deviations in terms of both injection and withdrawal and that, at the end of the month, the aggregated deviation may be positive (the forward market is long and resells the surplus on the Power Exchange) and negative (the forward market is short and purchases the deficit on the Power Exchange). It is worth recalling that, for each schedule, Participants may specify a positive price. In the case of an injection account, such price represents the minimum price (with respect to the market price) below which the Participant prefers purchasing electricity on the Power Exchange, rather than delivering the specified volume (likewise, in the case of a withdrawal account, the Participant may specify a maximum price above which such Participant prefers reselling electricity on the Power Exchange rather than withdrawing it). |
| Gestore dei Servizi Energetici - GSE SpA |
| company playing a central role in promoting, incentivising and developing renewable sources in Italy. GSE’s sole shareholder is the Ministry of Finance, exercising its rights jointly with the Minister of Economic Development - MSE. GSE controls two subsidiaries: AU (Acquirente Unico) and GME (Gestore dei Mercati Energetici). After the transfer of its electricity dispatching, Transmission and grid development assets to Terna S.p.A. (on 1 November 2005, in accordance with Prime Minister’s Decree of 11 May 2004), GSE is now focused on managing, promoting and incentivising renewables in Italy, an activity that it previously carried out in part. Gestore dei Servizi Energetici – GSE SpA plays a key role in the scheme incentivising electricity generation from renewable and assimilated sources (Resolution 6/92 of CIP - Interministerial Committee on Prices) and in managing the market system based on Green Certificates. |
| Green Certificates |
| certificates giving evidence of generation of electricity from renewables (RES-E), in compliance with art. 5 of the Ministerial Decree of 24 Oct. 2005 (as amended). Producers and importers of electricity from non-renewable sources exceeding 100 GWh/year are held to inject a given quota of RES-E into the power grid (renewable quota obligation). Green Certificates are issued by GSE for the first twelve years of operation of RES-E plants. Conversely, the electricity generated by RES-E plants, which have gone into operation or have been repowered since 1 January 2008, is certified as RES-E for the first 15 years of operation of the same plants. Green Certificates, each of which is worth 1 MWh, may be purchased or sold in the Green Certificates Market by parties with deficits or surpluses of generation from renewables. |
| Green certificates bilaterelas registration platform (PBCV) |
| The Green Certificates Bilaterals Registration Platform (PBCV) is an electronic platform enabling Participants to register and settle their bilateral transactions on Green Certificates (transfer of ownership) in accordance with the provisions laid down in the PBCV Rules. |
| Green Certificates Market (MCV) |
| venue for the trading of Green Certificates organised by GME as per art. 6 of Ministerial Decree of 11 Nov. 1999. |
| Herfindahl-Hirschman Index (HHI) |
aggregate market index measuring the degree of concentration and dispersion of Volumes offered and/or sold by Market Participants. The HHI is calculated, for each hour and each Macro-Zone, as the sum of the shares of the Volumes sold (or offered) in the market by Market Participants, multiplied by 100 and squared. The value of the HHI may range from 0 (perfect competition) to 10,000 points (monopoly). If the value is below 1,200, the market is competitive; if it is above 1,800, it is poorly competitive. The HHI is computed on an hourly basis and then aggregated into monthly simple averages. The shares are defined by considering the Volumes offered and/or sold (including those covered by Bilateral Contracts) by individual Market Participants (aggregated on the basis of their belonging group). GSE is regarded as an individual Market Participant.
Formulas
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| IDEX |
| the segment of the financial derivatives market (IDEM) organised and managed by Borsa Italiana S.p.A., where financial electricity derivatives are traded. |
| Injection Schedules |
| volume of electricity to be injected into the grid on the day, in the hour and at the Offer Point to which the schedule refers. |
| Macro-Zone |
aggregation of Geographical and/or Virtual Zones that is conventionally defined for the production of statistical market indexes. A Macro-Zone has a low frequency of market splitting and a homogeneous trend of selling Prices.
From 1 Apr. 2004 to 31 Dec. 2005, Macro-Zones were as follows: NORD (NORTH, including northern zones, Monfalcone, Turbigo), CENTRO SUD (CENTRE-SOUTH, (including central-northern zones, central-southern zones, southern zones, Piombino, Rossano, Brindisi), SICILIA (including the zones of Calabria, Sicilia and Priolo) and SARDEGNA (including the Zone of Sardegna).
From 1 Jan. 2006 to 31 Dec. 2008, Macro-Zones were as follows: MzNord (including northern zones, Monfalcone, Turbigo), MzSicilia (including the zones of Sicilia and Priolo), MzSardegna (including the Zone of Sardegna), MzSud (including the remaining zones).
From 1 Jan. 2009, Macro-Zones are as follows: MzNord (including northern zones and Monfalcone), MzSicilia (including the zones of Sicilia and Priolo), MzSardegna (including the Zone of Sardegna), MzSud (including the remaining zones). |
| Marginal Offer/Bid |
| in each Market Zone and each hour, it is the offer/bid with the highest Merit Order that has been accepted. |
| Margins |
| Step-up and step-down margins express the maximum volume that can be sold or purchased in the same hour at the Offer Point to which the margins refer, respectively. These margins may be notified to GME on a daily basis by Terna in respect of injection points and by the Dispatching User in respect of withdrawal points. |
| Market Results |
| Market results derive from the process of Market Resolution. They include both public results and confidential results. Public results include the Clearing Price, the Total Volumes Sold and the Total Volumes Purchased for each hour and in each Zone; these results are posted at www.mercatoelettrico.org. Confidential results include the acceptance/rejection of the offer/bid, the Prices and Volumes recognised, the reasons for the possible non-acceptance, the hourly Injection or Withdrawal Schedule; these results may only be accessed by the relevant Market Participants and are posted at www.IPEX.it. |
| Merit Order |
| criterion used for ranking Offers/Bids. In each hour, supply offers are ranked by non-decreasing price order, whereas demand bids are ranked by non-increasing price order. If supply offers and demand bids have the same price, reference is made to the priority criteria set forth in the combined provisions of the Integrated Text of the Electricity Market Rules and of the Dispatching Rules. |
| Merit-Order Dispatch (or Economic Dispatch) |
| activity that GME carries out on behalf of Terna S.p.A., in accordance with art. 5.2 of Legislative Decree 79/99, with AEEG’s Decisions 111/06 and 48/04, as well as with the Integrated Text of the Electricity Market Rules. This activity consists in determining the hourly Injection and Withdrawal Schedules of the units associated with Offer Points on the basis of the Offer Price and, if this price is equal, on the basis of priorities specifically assigned to the different types of unit by Terna S.p.A.. In particular, supply offers are accepted – and thus Injection Schedules are determined – by increasing offer price order, whereas demand bids are accepted - and thus Withdrawal Schedules are determined - by decreasing offer price order. Furthermore, Offers/Bids are accepted consistently with the Transmission Limits between pairs of Zones that are daily defined by Terna S.p.A.. The following electricity Volumes participate in merit-order dispatch: Volumes directly offered in the market; Volumes generated by plants with a capacity of less than 10 MVA, by CIP-6 plants and by plants selling electricity under Bilateral Contracts; and electricity import Volumes. |
| National Demand |
| electricity demand to be covered by the national power system. This value, which is variable hour by hour, includes consumption by Eligible and Captive final Customers, but does not include consumption for Pumped-Storage plants and exports. The forecast hourly national demand in each Zone is published by Terna S.p.A. and by GME in the Preliminary Information one day ahead. |
| National Transmission Grid (RTN) |
| National Transmission Grid as defined by the Decree of the Minister of Industry of 25 June 1999, as amended. |
| Non-Arbitrage Fee |
| Fee calculated for each demand bid/supply offer accepted in the MI in respect of withdrawal points. The fee is equal to the product between the accepted volume and the difference between the zonal price and the PUN. The Participant that has submitted the bid/offer pays this fee if negative/positive or receives this fee if positive/negative. |
| Offer Points (“Supply Point”) |
| dispatching point inside the grid in respect of which supply offers and demand bids are submitted and Injection and Withdrawal Schedules are defined. Offers Points are distinguished into Injection Points (“Supply Points for Injection”), Withdrawal Points (“Supply Points for Withdrawal”) and Mixed Points (“Mixed Supply Points”), i.e. both Injection and Withdrawal Points. |
| Offers/Bids |
in GME’s Spot Electricity Market (MPE), four types of offers/bids may be submitted:
- Simple Offers/Bids: they consist of a quantity (MWh) – price (€/MWh) pair, where the quantity is the maximum quantity of electricity that the Market Participant is willing to inject or withdraw into/from the system and the price is the minimum selling price or maximum purchasing price requested by the Market Participant. In the case of demand bids, a “0” price expresses the Market Participant’s willingness to buy at any price.
- Multiple Offers/Bids: they consist of multiple pairs of simple offers/bids. Each offer/bid is a separate offer/bid. However, the quantities specified in the different pairs should be jointly consistent with the step-up and step-down Margins that the related Dispatching Users have reported for each generating unit.
- Pre-Defined Offers/Bids: offers/bids which may be submitted at any time and which the Electricity Market Information System ( SIME) uses whenever no more recent valid offers/bids have been received. Pre-defined offers/bids may only be submitted into the Day-Ahead Market and the Ex-Ante MSD.
- Balanced Offers/Bids: groups of two or multiple offers/bids, with at least one supply offer and one demand bid, which refer to the same Geographical Zone and to the same hour and whose overall quantities are balanced and whose price (purchasing or selling price) is equal to zero.
They may only be submitted into the Intra-Day Market by one or multiple Market Participants and they benefit from maximum priority.
|
| Off-Peak Hours |
From 1 Apr. 2004 to 31 Dec. 2005: all the hours of non-working days (holidays); on working days, the hours from 0:00 to 07:00 and from 22:00 to 24:00, i.e. the applicable periods from 1 to 7, 23 and 24.
From 1 Jan. 2006: all the hours of non-working days (holidays); on working days, the hours from 00:00 to 08:00 and from 20:00 to 24:00, i.e. the applicable periods from 1 to 8 and from 21 to 24 |
| On-Peak Hours |
From 1 Apr. 2004 to 31 Dec. 2005: on working days only, the hours from 07:00 to 22:00, i.e. the applicable periods from 8 to 22.
From 1 Jan. 2006: on working days only, the hours from 08:00 to 20:00, i.e. the applicable periods from 9 to 20. |
| Order Book |
| a screen report displaying the set of trading orders that Market Participants have entered into the information system. The orders are ranked by price and entry time. |
| Pay as bid |
| valuing rule adopted in the Ancillary Services Market; under this rule, each Offer/Bid is valued at its own Offer Price. |
| Physical balance of a forward electricity account |
| In each Applicable period, it is the algebraic sum of the net position of the forward electricity account and of the schedules registered on the same account. |
| Platform for physical delivery of financial contracts concluded on IDEX (CDE) |
| the venue for registering transactions which correspond to financial electricity derivatives contracts concluded on IDEX and for which the Participant has requested to exercise the option of physical delivery in the ME. |
| Power Exchange |
| virtual venue where wholesale electricity supply and demand meet. GME is vested with the management of transactions in the Power Exchange under art. 5 of Legislative Decree 79/99. |
| Prices |
prices are expressed in €/MWh; they are specified to the second decimal figure and rounded off.
- Check Price: price determined by GME for the purposes of adequacy verifications in the MTE.
- Clearing Price: it generally identifies the electricity price that is set in the Day-Ahead Market and in the Intra-Day Market in each hour, at the intersection of demand and supply curves, and such as to balance demand with supply, maximise social well-being and perform efficient transactions. In case of market splitting into 2 or multiple Zones, both in the Day-Ahead Market and in the Intra-Day Market, the clearing price may be different in each Market Zone (Zonal Price). In the Day-Ahead Market, the zonal clearing price may be applied to all supply offers, to demand bids submitted in respect of mixed units and to demands bids submitted in respect of consuming units belonging to Virtual Zones. Demand bids in respect of consuming units that belong to Geographical Zones are always valued at the National Single Price (PUN). In the Intra-Day Market, in case of market splitting into 2 or multiple zones, the zonal clearing price is applied to all supply offers and demand bids.
- Conventional Price of the MGP: unit electricity price (defined in art. 2, para. 2.1 n) of the Integrated Text of the Electricity Market Rules and in the Technical Rules) which is conventionally assigned to non-price-dependent demand bids for the purpose of verifying the adequacy of financial guarantees.
- National Single Price (PUN): average of Zonal Prices in the Day-Ahead Market, weighted for total purchases and net of purchases for Pumped-Storage Units and of purchases by Neighbouring Countries’ Zones.
- Offer Price: price quoted in the offer/bid. Offers/Bids that are accepted in the Ancillary Services Market are valued at the offer price.
- Price of “scambio”: until 30 September 2004, it was calculated as the average of the PUN for each hourly band, weighted for the Volumes of “Scambio”. From 1 October 2004 to 31 December 2004, in accordance with AEEG’s Decision 122/2004, it was calculated as the average of the PUN, weighted for the Volumes that GME used for determining the PUN. This index expressed the electricity purchasing cost, in the “Scambio” system, for both Bilateral Contract holders and AU.
- Reference Price: average price referred to 1 MWh, weighted for the related quantities, of all transactions executed during a market Session.
- Simple Average Price: arithmetic average of hourly prices.
- Unconstrained Price: virtual price determined when there are no Transmission capacity constraints.
- Weighted Average Price: with regard to Italy, average of the National Single Price weighted for the Total Volumes, net of purchases for Pumped-Storage Units and of purchases by Neighbouring Countries’ Zones ; with regard to Geographical and/or Virtual Zones, average of Zonal Prices weighted for the overall Volumes sold in the Zone.
- Zonal Price (PZ): Clearing Price in each Geographical and Virtual Zone. |
| Pumped-Storage (Unit) |
| generating unit of a pondage hydro power plant permitting the pumping of water into upper basins. These units are related to Mixed Offer Points, i.e. points authorised to submit both supply offers and demand bids into the Day-Ahead Market. |
| Quantities/Volumes |
volumes of electricity traded in the Intra-Day Market.
- Off-Exchange Volumes: volumes of electricity sold through Bilateral Contracts, excluding Planned Deviations.
- Power Exchange Volumes (or On-Exchange Volumes): volumes of electricity traded by Market Participants in the Day-Ahead Market. On the supply side, they include all sales on the Power Exchange, including Terna S.p.A.'s. additional supply offers (if any), as well as the balance (if positive) between all the OTC injection and Withdrawal Schedules that have been registered onto the PCE. On the demand side, they include all the Power Exchange Volumes, including Terna S.p.A.'s. additional demand bids (if any), as well as the balance (if positive) between all the OTC withdrawal and Injection Schedules that have been registered onto the PCE.
- Total Volumes (“Sistema Italia”): overall volumes of electricity traded in the “Sistema Italia”. On the supply side, they include all sales on the Power Exchange, including Terna S.p.A.'s additional supply offers (if any), as well as all the OTC sales. On the demand side, they include the National Demand, the purchases for Pumped-Storage Units, the purchases by Neighbouring Countries’ Zones and Terna S.p.A.'s additional demand bids (if any).
- Unconstrained Volume: virtual volume determined when there are no Transmission capacity constraints.
- Volumes of “Scambio”: Power Exchange Volumes net of purchases for Pumped-Storage Units and purchases in the Power Exchange, if any, by Neighbouring Countries’ Zones. |
| Relative Volatility Index (IVR) |
| index of relative volatility of Prices. It measures the variability of the phenomenon in a giver period of time with a pure number (i.e. without unit of measurement), thereby facilitating comparisons of price volatility indexes in different geographic areas or periods of time. With reference to one month, the IVR is calculated as the weighted average of the coefficients of variation (“CV”), i.e. the ratio of the standard deviation to the average price in each of the 24 hours (or Applicable period) of a working day and of a holiday. For longer periods (quarter, half-year, year), the index is calculated as the weighted average of the volatility indexes in the months of the period. |
| RES-E |
| Electricity generated from renewable energy sources. |
| Reserve |
| capacity margin, with respect to forecast demand, that Terna S.p.A. creates to offset deviations between electricity generation and consumption. |
| Reserve Capacity |
| share of capacity that is not used on a scheduled basis to cover imbalances between generation and load due to random variations in demand, demand forecast errors, unplanned unavailability of generating capacity (e.g. faults) and unplanned deviations from schedules of imports from neighbouring countries. Generally, based on the status of the units which can make it available, Reserve capacity may be classified in two categories: spinning Reserve and cold Reserve. |
| Residual Supply Index (IOR) |
index referring to individual Market Participants that submit offers into the market. The index measures the presence of residual Market Participants, i.e. those that are necessary to cover demand. Unlike the RSI reported in the literature, the IOR is defined, for each Market Participant, as the ratio of the overall Volumes offered by competitors (in lieu of available capacity) to the overall Volumes sold (in lieu of the internal demand of each Zone, net of the maximum import capacity or increased by the maximum export capacity). Thus, the index measures the ex-post residuality. The IOR is 1 when there is one residual Market Participant; the closer is the index to 0, the higher will be the share of the Market Participant’s offer that can be sold, regardless of its Offer Price. The IOR is calculated by aggregating the Volumes offered by individual Market Participants (aggregated on the basis of their belonging group), including the Volumes covered by Bilateral Contracts. Also in this case, GSE is regarded as an individual Market Participant.
Formulas
Of this index, two derivations are published. The first is IORh(i), which represents the non-contestable market frequency. This index is calculated, for each Macro-Zone and each Market Participant, as the percentage of hours during which the Market Participant has been necessary. An aggregated version of the index (IORh) is also provided; this index is calculated, for each Macro-Zone, as the percentage of hours during which at least one Market Participant has been necessary.
Formulas
The second derivation is IORq(i), which represents the share of non-contestable sales made by each Market Participant. This index is calculated, for each Macro-Zone, as the ratio of the non-contestable Volumes (obtained from the IORi as the difference between the numerator and the denominator) to the sales made by the Market Participant. Of the same index, an aggregated version (IORq) is also provided; this index is calculated, for each Macro-Zone, as the ratio of the sum of the non-contestable Volumes of all Market Participants to the overall sales.
Formulas
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| Scambio |
| service that Gestore dei Servizi Energetici performed throughout the duration of Stage 2 as part of its electricity dispatching service; the service consisted of offsetting the differences between electricity injections and withdrawals into/from the grids having third-party connection obligation; it was provided to the customers of the eligible market and to wholesale customers. Stage 2 ended on 31 December 2004. |
| Session |
| set of activities directly related to receipt and processing of Offers/Bids, as well determination of the corresponding Market Results. |
| Settlement |
| set of activities consisting of billing, invoicing and payment of payables and receivables arising from the Electricity Market. |
| Sitting |
| period of time within which Offers/Bids are to be received in order to be considered as valid. |
| Stage 1 |
| period of market trading tests, which preceded the start of the Power Exchange. It ended on 30 March 2004. |
| Supply Curve |
| segment of line on the quantity-unit price plane, which refers to an Applicable period and which is obtained by cumulating Offers/Bids after checking their validity and ranking them by non-decreasing unit price order. |
| Supply Point for Injection |
| – see Injection Point. |
| Supply Point for Withdrawal |
| – see Withdrawal Point. |
| Terna - Rete Elettrica Nazionale SpA |
| company in charge of electricity Transmission and dispatching over the high-voltage (HV) and extra-high voltage (EHV) grid throughout Italy. Its current structure results from the acquisition (November 2005) of part of the assets of GSE, as set forth in Prime Minister’s Decree of 11 May 2004. Terna is a listed company. Its shares were first traded on the Stock Exchange on June 2004. Currently, its relative majority shareholder is “Cassa Depositi e Prestiti”, having a stake of 29.99%. |
| Transmission |
| activity consisting in transmitting and transforming electricity on the interconnected high- and extra-high-voltage grid in order to deliver it to customers, distributors and users of self-generated electricity.Transmission activity consisting in transmitting and transforming electricity on the interconnected high- and extra-high-voltage grid in order to deliver it to customers, distributors and users of self-generated electricity. |
| Universal-Service Customers |
| from 1 July 2007, all household customers and small companies, provided that all the withdrawal points of the individual company are connected at low voltage. |
| Variation Coefficient (CV) |
| index of price volatility, which is calculated as the ratio of the standard deviation to the absolute value of the average of hourly Prices, expressed in percentage. It is a relative dispersion index, which compares phenomena of different number and with different units of measurement, because it is a pure number (i.e. without unit of measurement). |
| Wholesale price (PGN) |
| estimated yearly average of a given component of the price at which electricity is sold to distributors for resale to the captive market; such component covers the purchasing and operating costs of Acquirente Unico. It is expressed in €cent/kWh. Before the start of the Power Exchange, the value of the PGN was administratively set by AEEG and consisted of: i) one component covering variable costs, which was quarterly adjusted and based on the trend of Prices of a basket of fuels; and ii) one component covering fixed costs, differentiated in the various hourly bands. |
| Wholesaler |
| natural or legal person buying and selling electricity without carrying out electricity generation, Transmission and distribution activities in the countries of the European Union. |
| Withdrawal Schedules |
| volume of electricity to be withdrawn from the grid on the day, in the hour and at the Offer Point to which the schedule refers. |
| Zone |
portion of the power grid where, for system security purposes, there are physical limits to transfers of electricity to/from other Geographical Zones. Zones are defined by TERNA SpA and approved by AEEG. They are distinguished into different types.
In accordance with AEEG’s Decision ARG/elt 116/08, which incorporates Terna’s document identifying the zones of the so-called “relevant grid” (issued on 19 Sept. 2008), the Zones for the 2009-2011 period are as follows:
- Geographical Zone: representing a portion of the national grid. Geographical zones are northern Italy (NORD), central-northern Italy (CNOR), central-southern Italy (CSUD), southern Italy (SUD), Sicilia (SICI), Sardegna (SARD).
- National Virtual Zone: Constrained Zone ("Point of Limited Production"). It includes: Monfalcone (MFTV), Rossano (ROSN), Brindisi (BRNN), Priolo (PRGP) and Foggia (FOGN).
- Neighbouring Country’s Virtual Zone: point of interconnection with neighbouring countries. It includes: France (FRAN), Switzerland(SVIZ), Austria (AUST), Slovenia (SLOV), Corsica (CORS), Corsica AC (COAC) and Greece (GREC).
- Market Zone: aggregation of Geographical and/or Virtual Zones such that the flows between the same zones are lower than the Transmission Limits notified by Terna SpA. This aggregation is defined on an hourly basis as a result of the resolution of the Day-Ahead Market and Intra-Day Market. In the same hour, different Market Zones may have non-different Zonal Prices. |
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