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glossary
A B C D E F G H I J K L M N O P Q R S T U V W X Y Z

A
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.

Access Profile (GOs)
i. if the Participant is present in the GO Registry with a single access profile, it is the access profile - among those identified in the Technical Rules - that GSE has assigned to the Participant upon entry into the GO Registry through which the Participant takes part in the M-GO and/or the PB-GO ; ii. if the Participant is present in the GO Registry with multiple access profiles, each of the access profiles - among those identified in the Technical Rules - that GSE has assigned to the Participant upon entry into the GO Registry through which the Participant takes part in the M-GO and/or the PB-GO.

Acquirente Unico (AU - Single Buyer)
company (“società per azioni”) created by Gestore della Rete di Trasmissione Nazionale (now Gestore dei Servizi Energetici - GSE) with the task of guaranteeing the availability of electricity to cover the demand of Captive Customers AU operates by purchasing the required electrical capacity, reselling it to distributors on non-discriminatory terms and making it possible the application of a single national tariff to customers. To do so, AU may purchase electricity in the Power Exchange or through Bilateral Contracts. The legislation on emergency oil stocks assigned additional responsibilities to AU.

Adjustment Market (MA)
trading venue where producers, wholesalers and final customers modified the injection/withdrawal schedules that they had defined in the Day-Ahead Market (MGP). On 1 Nov. 2009, the MA was replaced by the Intra-Day Market (MI).

Adriatic LNG segment 
Segment of the PAR dedicated to the trading of regasification capacity slots at the regasification terminal managed by Terminale GNL Adriatico Srl, also in implementation of the provisions of the regasification code.

Allocation request 
function that can be activated, at the request of each regasification company in each segment of the PAR, dedicated to the allocation of Capacity no longer available in auction.

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 congestions, 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 congestions 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).

Annual and multi-annual capacity 
the primary and issued regasification capacity, available for allocation, at each regasification terminal, at the beginning of each thermal year for the thermal year and/or the thermal year/s after the one in which the allocation for the continuous capacity service is made.

Applicable period 
period of time taken as a reference for the individual offer/bid submitted into the Electricity Market.

ARERA 
– see Autorità di Regolazione per Energia Rete e Ambiente

Ascending open auction 
the method for trading products for the allocation of annual and multi-annual regasification capacity on the PAR referred to in Article 17 of EU Regulation no. 459/2017, which provides for the submission, modification and cancellation of purchase offers associated with a scale of rising Prices compared to the Reserve price in the context of consecutive allocation procedures included in a single Session, in order to conclude transactions at a single price.

AU 
– see Acquirente Unico.

Auction Trading 
mechanism of trading which involves the submission, change and cancellation of trading orders within a given time interval, with a view to concluding contracts at a single future time and at a single price.

Auctioning Procedures 
procedures organised and managed by GSE in accordance with article 4 of AEEG’s Decision ARG/elt 104/11.

Authorised User 
the party referred to in art. 1, para. 1 k) of AEEG’s Decision ARG/gas 45/11, i.e. the user of storage services (except for Transmission companies and users of the strategic storage service only) who/which – within the framework of the same services – holds resources to be offered for balancing purposes in accordance with the above-mentioned Decree. Authorised users also include users holding storage capacities as per Legislative Decree 130/10 in respect of the same capacities.

Autorità di Regolazione per Energia Rete e Ambiente (ARERA -Electricity, Gas and Water System 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, ARERA is responsible, among others, for defining rules for Merit-Order Dispatch and market power control mechanisms.


B
Balance of PCE Schedules 
in each Applicable period, the difference between the sum of Injection Schedules and the sum of Withdrawal Schedules coming from the OTC Registration Platform (PCE) and registered in the Day-Ahead Market (MGP). The balance of PCE schedules is also equal to the algebraic sum of the physical schedules of forward electricity (injection and withdrawal) accounts.

Balancing Charges (also “Unbalancing charges”)
charges owed by parties injecting or withdrawing electricity or natural gas into/from the grid or network (Dispatching Users or Balancing Users, respectively) 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 Ex-Ante 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 to balance energy injections and withdrawals into/from the grid in real time.

Balancing of the Electricity Market 
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 of the Gas Market 
service that Snam Rete Gas provides as part of its dispatching service. The balancing service consists in monitoring and controlling flow parameters (flow rates and pressures) in real time, so as to guarantee secure and efficient gas transport and handling from injection points to withdrawal points.

Balancing User 
Balancing User is the person referred to in Article 1, paragraph 1.2 h) of Annex A to Resolution 312/2016/R/GAS.

Bids/Offers 
– see Offers/Bids.

Bilateral 
– see Bilateral Contract.

Bilateral Contract (Bilateral or Over-The-Counter Contract or OTC Contract)
contract of supply of electricity or natural gas concluded off the markets managed by GME.

Bilateral Contract Registered on the PCE 
contract of supply of electricity made off the Power Exchange between a producer/Wholesaler and an Eligible Customer. The price for the supply, as well as the injection and withdrawal profiles are freely agreed by the parties. However, under AEEG’s Decision 111/06 (as subsequently amended and supplemented), transactions and related Injection or Withdrawal Schedules are to be registered onto the OTC Registration Platform (PCE),where they will be checked for consistency with the Transmission constraints on the National Transmission Grid.


C
Capacity during the thermal year 
the primary and issued regasification capacity, made available for allocation, for periods of time shorter than the thermal year, at each regasification terminal for the continuous and spot capacity service.

Capacity no longer available in auction 
the Capacity during the thermal year, remaining after the last auction, which is allocated by each regasification company in application of the first come first served principle.

Capacity Reserve 
– see Reserve Capacity.

Captive Customers  
until 30 June 2007, final customers allowed or opting to contract for energy only with their local distributor.

Cascading 
procedure under which quarterly and yearly Forward Contracts (futures, forwards and Contracts for Difference) are replaced upon maturity with an equivalent number of contracts of shorter maturity. The new positions are opened at a price equal to the final Settlement price of the original contracts.

CCC 
- see Contract Covering the Risk of Volatility of the Fee for Assignment of Rights of Use of Transmission Capacity.

CCT 
- see Fee for Assignment of Rights of Use of Transmission Capacity.

CDE 
- see Platform for physical delivery of financial contracts concluded on IDEX (CDE).

CDM 
- see Clean Development Mechanism.

CHP Generation 
- see Co-generation.

CIP-6 
resolution no. 6 adopted in 1992 by Comitato Interministeriale Prezzi (CIP - Interministerial Committee on Prices). The resolution promotes the construction of plants for generation of electricity from renewable and/or other eligible 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 on 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). Since 1 January 2005, GSE has been offering CIP-6 electricity directly on 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 - CHP)
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.

Combined Heat & Power Generation 
– see Co-generation.

Congestion Rent 
overall value of Fees for Assignment of Rights of Use of Transmission Capacity (CCT) that Terna S.p.A. collects from parties concluding electricity sale contracts. Terna collects these fees: i) explicitly from parties concluding Bilateral Contracts, by applying a fee for each unit of electricity sold; and ii) implicitly from parties selling electricity on the Power Exchange by receiving from GME the difference between the value of purchases and of sales in the market.

Constrained Zone (“Point of Limited Production” or “Pole 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.

Continuous Trading 
mechanism of trading based on automatic matching of demand bids with supply offers, with continuous entry of new Bids/Offers during the trading sessions.

Contract Covering the Fee for Assignment of Rights of Use of Transmission Capacity on Foreign Interconnections (DCT)
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 cross-border transits. The matter is covered by AEEG's Decision 288/06.

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 this 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 subsequently amended.

Contract Types in the MTE 
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.

Cumulative Average Price of Green Certificates (The platform of the GC Exchange was disabled on 30/06/2016) 
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 traded. This price is monthly updated.


D
Daily products 
The types of products listed in the MPEG relating to the trading of electricity whose delivery is made at each of the relevant periods, belonging to the trading day, included in the traded daily product Delivery Profile.

Daily products market (MPEG)
The trading venue where the Daily products are traded.

Day-Ahead Gas Market  (MGP-GAS)
The trading venue of gas purchase and sale Offers/Bids for the three gas-days following the one in which the trading Session opens. The MGP-GAS can be operated by all Participants authorized to carry out transactions on the Virtual Trading Point (PSV). The MGP-GAS takes place in the way of Continuous Trading.

Day-Ahead Market (MGP)
venue for the trading of electricity supply offers and demand bids for each hour of the next day. All electricity operators may participate in the MGP. In this market, supply offers may only refer to Injection and/or Mixed Points and demand bids only refer to Withdrawal and/or Mixed Points. GME accepts Offers/Bids by Merit Order, taking into account the Transmission Limits notified by Terna S.p.A.. Accepted supply offers are remunerated at the Zonal Clearing Price. Accepted demand bids are remunerated at the National Single Price (PUN). Accepted Offers/Bids determine the preliminary Injection and Withdrawal Schedules of each Offer Point for the next day. Participation in this market is optional.

DCT 
- see Contract Covering the Fee for Assignment of Rights of Use of Transmission Capacity on Foreign Interconnections.

Delivery Period 
Period during which:
- The electricity subject to Daily products or the Forward Contracts is injected/withdrawn.
- The natural gas subject of the Forward Contracts is injected/withdrawn.

Delivery Profile 
The baseload or peakload profile that characterizes the daily product listed in the MPEG.

Demand Curve  
segment of line on the volume-unit price plane, which refers to an Applicable period and which is obtained by cumulating Demand Bids verified to be technically adequate and ranked by non-increasing unit price order.

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 Customer 
– see Dispatching User.

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.

Dispatching User (also “Dispatching Customer”)
party that has entered into a dispatching service contract with Terna S.p.A.. For each Offer Point, it is the only party who/which is required to submit Offers/Bids into the Ancillary Services Market in respect of Offer Points authorised for this market.


E
Economic Dispatch 
– see Merit-Order Dispatch.

Electricity & Gas Regulator 
– see AEEGSI.

Electricity Account Registration Platform (PCE) / OTC registration 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).

Electricity Market (ME)
the set of the Spot Electricity Market (MPE), the Forward Electricity Market (MTE) and the Platform for physical delivery of financial contracts concluded on IDEX (CDE).

Electricity Market Participant 
Individual or organisation that is admitted to trading in the Electricity Market or in the Green Certificates Market.

Eligible Customer 
• Electricity: natural or legal person entitled to choose his/her/its own supplier of electricity (producer, distributor, Wholesaler). Since 1 July 2004, under AEEG’s Decision 107/04, all natural or legal persons not buying electricity for their own household use, including producers and wholesale customers, have been eligible customers. On 1 July 2007, all customers became eligible. Since 1 January 2005, eligible customers have been entitled to purchase electricity directly on the Power Exchange.
• Natural gas: natural or legal person entitled to choose his/her/its own supplier of gas (producer, importer, distributor, Wholesaler) both in Italy and abroad. On 1 January 2003, all final customers became eligible.

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 Decrees of 20 Jul. 2004), as subsequently amended and supplemented by the Ministerial Decrees of 21 Dec. 2007, of 28 Dec. 2012 and of 11 Jan. 2017. 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 under an authorisation granted by GSE, may be sold or bought in the Energy Efficiency Certificates Market (MTEE) or bilaterally. Bilateral transactions should then be registered on the Platform for Registration of Energy Efficiency Bilaterals (TEE Register).

Energy Markets 
the set of the Day-Ahead Market (MGP), the Intra-Day Market (MI), the Daily products market (MPEG), the Forward Electricity Market (MTE) and the Platform for physical delivery of financial contracts concluded on IDEX (CDE).

ETS 
- see Emission Trading Scheme.

EU-ETS 
- see Emission Trading Scheme.

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 consists of three scheduling substages: MSD1, MSD2 and MSD3. The Sitting for bid/offer submission into the ex-ante MSD is a single one and 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 2:00 p.m. of the day of delivery. In the ex-ante MSD, Terna accepts energy demand bids and supply offers to relieve residual congestions and create Reserve Margins.


F
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 forward markets of electricity and natural gas and concerning future supplies of electricity and natural gas, respectively.

Forward Electricity Market (MTE)
venue where Forward Electricity Contracts with delivery and withdrawal obligation are traded.

Forward Gas Market (MT-GAS) 
venue for the trading of forward natural-gas contracts with delivery-making/-taking obligation.


G
Gas Market Participant 
natural person (individual) or legal person (organisation) authorised to trade in the Spot Gas Market and in the Forward Gas Market.

GCs 
- see Green Certificates (CV in Italian).

Gestore dei Mercati Energetici  (GME)
Joint stock company (“società per azioni”) established by GSE. GME is vested with the economic management of the Electricity Market, thus ensuring the availability of an adequate level of Reserve Capacity. Previously known as “Gestore del Mercato Elettrico”, GME changed its registered name on 19 November 2009. In particular, GME manages the Day-Ahead Market (MGP), the Intra-Day Market (MI), the Daily products market (MPEG), the Ancillary Services Market (MSD) and the Forward Electricity Market (MTE) and the Platform for the physical delivery of the financial contracts concluded on the IDEX.(CDE). GME also manages the Environmental Markets (Energy Efficiency Certificates Market and Market of Guarantees of origin), as well as spot and forward natural gas markets (MGAS) under art. 30 of Law no. 99 of 23 July 2009and enforcing art. 32, para. 2 of Legislative Decree no. 93 of 1 June 2011, as well as the provisions of the dell'AEEGSI Resolution no. 312/2016/R/GAS. GME has also taken over the management of the P-GAS platform and, in the field of fuels, the management of the P-Logistics platform and the PDC-oil. As part of regasification, it organizes and manages the PAR platform.

Gestore dei Servizi Energetici  - GSE SpA
publicly-owned company (“società per azioni”) playing a central role in promotion, support and development of renewable sources in Italy. GSE’s sole shareholder is the Ministry of Economy and Finance, which exercises its shareholder rights together with the Ministry of Economic Development. GSE controls three subsidiaries: AU (Acquirente Unico); GME (Gestore dei Mercati Energetici); and Ricerca sul Sistema Energetico (RSE).

Gestore della Rete di Trasmissione Nazionale 
previous name of Gestore dei Servizi Energetici - GSE, prior to the transfer of part of its assets to Terna S.p.A..

GME 
– see Gestore dei Mercati Energetici.

GO Registry  
the registry of Guarantees of origin organised and managed by GSE, in which the GOs of each Participant are entered into the related Ownership Account if the Participant is present in the GO Registry with a single Access Profile, or in the related ownership accounts, each corresponding to the single access profiles, if the Participant is present in the GO Registry with multiple access profiles.

Green Certificates (GCs) (The mechanism is terminated pursuant to the provisions of the Decree of the Ministry of Economic Development of 6 July 2012) 
under art. 11 of the Ministerial Decree of 18 December 2008 (as subsequently amended and supplemented), Green Certificates give proof of electricity generation from renewables (RES-E). Under Legislative Decree 79/99, producers and importers have the obligation (in effect since 2002) to inject a given quota of RES-E into the power grid every year. This quota is equal to 2% of electricity from non-renewable sources produced or imported in the previous year and exceeding 100 GWh. The quota was increased in subsequent years until reaching 7.55% in 2012.

The obligation may also be fulfilled by purchasing a corresponding number of GCs giving proof of RES-E produced by other parties.

GCs are issued by GSE at the request of owners of RES-E (“IAFR”) plants. GCs (each of which is worth 1 MWh) are tradable certificates that may be bought or sold in the Green Certificates Market (MCV) or bilaterally. Bilateral transactions must then be registered on the Green Certificates Bilaterals Registration Platform (PBCV).

Legislative Decree no. 28 of 3 March 2011, implementing Directive 2009/28/EC on the promotion of the use of energy from renewable sources and amending and subsequently repealing Directives 2001/77/EC and 2003/30/EC, reformed the system of support for RES-E, providing among others that: i) the quota for producers and importers of electricity from conventional sources, starting from its value in 2012, should decrease in subsequent years until reaching zero in 2015; and ii) the current market system based on GCs should be gradually replaced by a feed-in tariff system.

Green Certificates Bilaterals Registration Platform (PBCV) – Disabled on 30-06-2016 
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) – Disabled on 30-06-2016 
venue for the trading of Green Certificates organised by GME as per art. 6 of Ministerial Decree of 11 Nov. 1999, as superseded by the Ministerial Decree of 18 December 2008.

GSE 
– see Gestore dei Servizi Energetici - GSE SpA

Guarantees of origin (GOs)
Guarantees of Origin are the documents referred to in art. 15 of Directive 2009/28/EC. They are aimed at giving proof to final customers of the share or amount of renewable energy in the fuel mix of a given energy supplier. They are issued by GSE under the Ministerial Decree of 6 July 2012. GOs (each of which is worth 1 MWh) are tradable certificates that may be sold or bought in the GO Market (M-GO) or bilaterally. Bilateral transactions must then be registered on the Platform for registration of bilaterals of guarantees of origin (PB-GO).


H
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

HHI 
– see Herfindahl-Hirschman Index.

Hourly Bands 
homogeneous hours grouped by expected load level. AEEG’s Decision 181/06 defined the hourly bands applicable from 1 January 2007: F1 - peak-load (on-peak) hours; F2 - mean-load (mid-level) hours; F3 - Low-Load (off-peak) hours.


I
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 energy to be injected into the grid/network on the day, in the hour and at the Offer Point to which the schedule refers.

Intra-Day Gas Market (MI-GAS)
The trading venue of gas purchase and sale Offers/Bids for the gas-day corresponding the one in which the trading Session opens. The MI-GAS takes place in the way of Continuous Trading.

Intra-Day Market (MI)
venue for the trading of electricity supply offers and demand bids, in respect of each hour of the next day, which modify the Injection and Withdrawal Schedules resulting from the Day-Ahead Market. GME accepts Offers/Bids submitted into the MI by Merit Order, taking into account the Transmission Limits remaining after the Day-Ahead Market. Accepted Offers/Bids are remunerated at the Zonal Clearing Price. Accepted Offers/Bids modify the preliminary Schedules and determine the revised/updated Injection and Withdrawal Schedules of each Offer Point for the next day. Participation in the MI is optional.

IOM 
– see Marginal Market Participant (or Price-Setting Operator) Indexes.

IOR 
– see Residual Supply Index.

IPEX 
Italian Power Exchange.

Issued capacity 
the Annual and multi-annual capacity, the Capacity during the thermal year as well as the Capacity no longer available in auction.

Italian Power Exchange  (IPEX)
name under which the Italian Power Exchange is known abroad.

ITM 
- see Marginal Technology (or Price-Setting Technology) Index.

IVA 
- see Absolute Volatility Index.

IVR 
- see Relative Volatility Index.


K
Kyoto Protocol 
international environmental treaty signed in the Japanese city from which it takes its name. The treaty was signed on 11 December 1997 by over 160 countries on the occasion of the Conference of the Parties (COP3) to the United Nations Framework Convention on Climate Change (UNFCCC) and global warming. The treaty entered into force on 16 February 2005, after its ratification by Russia. The treaty requires industrialised countries to sharply cut down their emissions of pollutants (carbon dioxide and five other greenhouse gases, i.e. methane, nitrogen oxide, hydrofluorocarbons, perfluorocarbons and sulphur hexafluoride) by at least 5.2% from their 1990 levels (base-year) in the 2008-2012 period. The protocol also covers the trading (purchase and sale) of greenhouse gas emission units.


L
Liquidity 
ratio of Volumes traded on the exchange (MGP) to Total Volumes (including Bilateral Contracts) traded in the “Sistema Italia”).

Liquidity 
ratio of Power Exchange Volumes to Total Volumes.

Low-Load Hours 
– see Off-Peak Hours.


M
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 (northern Italy, including northern zones, Monfalcone, Turbigo), CENTRO SUD (central-southern Italy, including central-northern zones, central-southern zones, southern zones, Piombino, Rossano, Brindisi), SICILY (including the zones of Calabria, Sicily and Priolo) and SARDEGNA (including the Zone of Sardinia).
From 1 Jan. 2006 to 31 Dec. 2008, Macro-Zones were as follows: MzNord (including northern zones, Monfalcone, Turbigo), MzSicilia (including the zones of Sicily and Priolo), MzSardegna (including the Zone of Sardinia, MzSud (including the remaining zones).
Since 1 Jan. 2009, Macro-Zones have been as follows: MzNord (including northern zones and Monfalcone), MzSicilia (including the zones of Sicily and Priolo), MzSardegna (including the Zone of Sardinia), MzSud (including the remaining zones).

Marginal Market Participant (or Price-Setting Operator)
Market Participant that has set the selling price in each hour and in each Zone.

Marginal Market Participant Index (or Price-Setting Operator Index – IOM)
index referring to individual Market Participants that have set the selling price at least once. For each Market Participant, in each period of time and each Macro-Zone, the index is defined as the share of the Volumes on which the Market Participant has set the price, i.e. as the ratio of the sum of the Volumes sold (including Bilateral Contracts), in the Geographical zones (included in the Macro-Zone) where the Market Participant has set the price, to the sum of the overall Volumes sold in the Macro-Zone. The IOM is calculated directly on a monthly basis.
Formulas

Marginal Offer/Bid 
in each Market Zone and each hour, it is the offer/bid with the highest Merit Order that has been accepted.

Marginal Technology Index (or Price-Setting Technology Index – ITM)
index entirely similar to the IOM (i.e. Marginal Market Participant Index). It takes into consideration the technology used for power generation rather than the Market Participant.
Formulas


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 Clearing Price (MCP)
equilibrium price; by extension, it identifies the rule for remunerating Offers/Bids that are accepted in the Day-Ahead Market and in the Intra-Day Market on the basis of the price of the Marginal Offer/Bid.

Market Coupling 
mechanism of co-ordination between regulated electricity markets in different national states, having the purpose of managing congestions on interconnected networks (cross-border trade). The goal of market coupling is to maximise the use of interconnection capacity under cost-effectiveness criteria (ensuring that electricity flows are directed from markets with lower Prices towards those with relatively higher Prices).

Market Participant 
natural or legal person admitted to operate in the Electricity Market.

Market Resolution 
process of acceptance of Offers/Bids submitted into the market; the process determines the accepted Offers/Bids, the price at which Offers/Bids are valued, the Injection and Withdrawal Schedules of the points to which Offers/Bids refer. In the electricity markets, market resolution takes place after the close of the Sitting and it uses a marginal-price auction mechanism (Day-Ahead Market, Intra-Day Market) and a pay-as-bid auction mechanism (Ancillary Services Market).

Market Results 
market results derive from the process of Market Resolution. They include both public and confidential results. For each Applicable period and each Zone (in the case of MGP, MI and MSD), the public results include the Clearing Price, the Total Volumes Sold and the Total Volumes Purchased; these results are posted at www.mercatoelettrico.org. For each Applicable period and each bid/ask, the confidential results include the acceptance/rejection of the bid/ask, the Prices and Volumes recognised, the reasons for the possible rejection, the hourly Injection or Withdrawal Schedule (in the case of MGP, MI and MSD); these results may only be accessed by the relevant Market Participants and are posted at https://www.IPEX.it for the Electricity Market and at https://gas.IPEX.it/MGasWebSite/ for the Gas Market.

Market Shares 
share of overall sales made by a Participant in the Day-Ahead Market (MGP), including the Volumes covered by Bilateral Contracts.

MB  
(see Balancing Market)

MCP 
– see Market Clearing Price.

MCV 
– see Green Certificates Market.

ME 
– see Electricity Market.

Merit Order 
criterion used for ranking Offers/Bids. For each Applicable period, 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 for the Electricity Market, as well as of the Gas Market Rules for the Gas Market.

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 imported electricity Volumes.

M-GO 
the GO Market, i.e. the venue for the trading of GOs organised and managed by GME.

MGP 
– see Day-Ahead Market.

MGS 
regulated market for the trading of gas stored (MGS): means the market in which the trading of stored gas purchase and sale Offers/Bids takes place for each gas-day immediately before the one of the Session closure.

MI 
– see Intra-Day Market.

Ministerial Decree of 18 March 2010 
the Decree of the Minister of Economic Development of 18 March 2010 concerning the procedure under which importers shall fulfil the obligation referred to in Article 11, para. 2 of Law-Decree 7/07, as a result of the provisions of Article 30, para. 2 of Law 99/09, as well as the procedure under which GME shall - in the first implementation stage of Article 30, para. 2 of Law 99/09 - take on the responsibility of managing supply offers and demand bids for the quotas of imported gas referred to in Article 11, para. 2 of Law-Decree 7/07.

Mixed Points 
– see Mixed Offer Points.

Mixed Supply Points 
– see Mixed Offer Points.

MPE 
- see Spot Electricity Market.

MPL 
locational products market (MPL): means the market in which sessions are held, activated at the request of the person responsible for the balancing and dedicated to the trade of purchase and sale Offers/Bids of gas related to the same gas-day of the Session or the gas-day immediately after, necessary to manage the physical demands within the balancing Zone or deviations provided between overall injections and withdrawals on the network.

MSD 
– see Ancillary Services Market.

MTE 
- see Forward Electricity Market.


N
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 in advance.

National Transmission Grid (RTN)
Nation power Transmission grid as defined by the Decree of the Minister of Industry of 25 June 1999, as amended.

Natural-Gas Market 
the market consisting of the MGP-GAS, the MI-GAS, MPL, MGS and the MT-GAS.

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.


O
Offer Point (“Supply Point”)
For electricity markets: the dispatching point inside the grid in respect of which supply offers and demand bids are submitted and Injection and Withdrawal Schedules are defined. Offer Points are distinguished into Injection Points (“Supply Points for Injection”), Withdrawal Points (“Supply Points for Withdrawal”) and Mixed Points (“Mixed Supply Points”, i.e. for both injection and withdrawal). For MGAS point of entry and/or exit of the transport network in relation to which the Quantity object of purchase /sale Offers/Bids refers for the purporse of trading through the MPL

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 have maximum priority.
- PAR offers: the purchase offer of regasification capacity submitted by participants in each Order Book of the PAR.
 
In GME’s Spot Gas Market, the following types of offers/bids may be submitted:
  • For MGP-GAS and MI-GAS:
    • valid until cancellation: the bid/offer is executed, even in part, for the available Volumes and on the price terms specified by the Market Participant. Any unexecuted volume is reproposed in the Order Book until the end of the Session, when it is automatically cancelled;
    • valid until expiration: the bid/offer is executed, even in part, for the available Volumes and on the price terms specified by the Market Participant. Any unexecuted volume is reproposed in the Order Book until the expiration specified in the bid/offer, when it is automatically cancelled;
    • execute and cancel: the bid/offer is executed, even in part, for the available Volumes and on the price terms specified by the Market Participant. Any unexecuted residual volume is automatically cancelled;
    • execute or cancel: the bid/offer is only executed for the entire volume and on the price terms specified by the Market Participant. If, upon entry into the Order Book, this is not possible, then the bid/offer is automatically cancelled.
  • For MPL and MGS
    • Simple Offers/Bids: they consist of a volume (MWh) – price (€/MWh) pair, where the volume expresses the maximum willingness to sell or purchase gas and the price represents the maximum purchasing price or minimum selling price that is requested. In the case of demand bids, a “0” price expresses the willingness to buy at any price.
    • Multiple Offers/Bids: they consist of multiple pairs of simple Offers/Bids. Each offer/bid represents a distinct offer/bid.

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

OLT segment 
Segment of the PAR dedicated to the trading of regasification capacity slots available at the regasification terminal managed by OLT Offshore Toscana S.p.A, also in implementation of the provisions of the regasification code.

On-Exchange Volumes 
– see Power Exchange Volumes.

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.

On-Schedule Deviation 
– see Planned Deviation.

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.

OTC Contract 
– see Bilateral Contract.

OTC Registration Platform (or Electricity Account Registration Platform) - PCE
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, is allowed up to two days before the start of the corresponding physical delivery. Therefore, each contract may be registered 60 to 2 days ahead of 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 scheduled deviation may be both 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).

Over-the-Counter Contract 
– see Bilateral Contract.

Ownership Account  (GOs)
i. if the Participant is present in the GO Registry with a single Access Profile, the account of the GO Registry that GSE has associated with the Participant’s access profile;
ii. if the Participant is present in the GO Registry with multiple access profiles, each of the different accounts of the GO Registry that GSE has associated with each of the Participant’s access profiles.


P
PAB 
– see Demand-Side Bilaterals Adjustment Platform.

PAR 
trading platform organized and managed by GME for the allocation of regasification capacity in implementation of the provisions of Article 5, paragraph 5.11, of the TIRG.

PAR participant 
the party allowed to operate on the PAR.

Pay as bid 
  • on the MSD: valuation rule adopted on the MSD, based on which each offer is valued at its offer price.
  • on the PAR: the trading method that involves the submission, modification and cancellation of trading orders in a specific time interval, in order to conclude transactions valued at the price associated with the accepted purchase offer.

PB-GAS 
It means the platform regulated and managed by GME pursuant to Resolution 312/2016/R/GAS until 31 March 2017.

PB-GO 
platform for registering Bilateral transactions of GOs, as well as Bilateral transactions resulting from Auctioning Procedures.

PCE 
- see Electricity Account Registration Platform (PCE)/OTC registration platform (PCE).

PCR 
- see Price Coupling of Regions.

Peak-Load Hours  
– see On-Peak Hours.

P-GAS 
platform, organised and managed by GME, for the trading of natural gas Bids/Offers; it consists of the Imports’ Segment, of the Royalties’ Segment and of the Segment referred to in Legislative Decree 130/10.

P-GAS Buying Participant 
a P-GAS Participant who/which may submit only demand bids.

P-GAS Importer 
the party to whom/which the Ministry of Economic Development has granted authorisations to import gas under art. 3 of Legislative Decree 164/00, as subsequently amended by art. 28 of Legislative Decree no. 93 of 1 June 2011. A P-GAS importer is required to bid quotas of imported gas under Law no. 40 of 2 April 2007.

P-GAS Offers/Bids  
trading orders: demand bids or supply offers that Participants enter into the order books or the auctions of the P-GAS and that contain the necessary data for posting and execution.

P-GAS Participant 
an individual or organisation admitted to trading on the P-GAS.

P-GAS Reference Price 
average price per GJ, weighted for the related quantities, of all transactions executed during a Session of the Imports’ Segment of the P-GAS.

P-GAS Selling Participant 
P-GAS Participant that has submitted to GME the documents required to acquire such status and that may enter both supply offers into the order books or auctions for which he/she/it is authorised and demand bids for Volumes of gas offered by other sellers in accordance with the P-GAS Regulations.

P-GAS Terms and Conditions of Supply 
terms and conditions which are specified in the contract of supply and/or purchase/sale of gas and in the related documents, if any, and which are applied by the selling participant, including requirements or obligations to be fulfilled prior to the contract.

PGN 
– see Wholesale price.

Physical balance of a forward electricity account 
in each Applicable period, it is the algebraic sum of the net position of the account and of the schedules registered on the same account.

Platform for physical delivery of financial contracts concluded on IDEX (CDE) 
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.

PME 
– see European Average Price.

Point of Limited Production (or Pole of Limited Production)
– see Constrained Zone.

Power Exchange 
virtual venue where wholesale electricity supply and demand meet. GME is vested with the management of transactions on the Power Exchange under art. 5 of Legislative Decree 79/99.

Preliminary Information 
information that GME receives from Terna S.p.A. before the close of the sittings of both the Day-Ahead Market and the Intra-Day Market.

Price Coupling of Regions (PCR)
co-operation agreement between the six main European power exchanges (APX/ENDEX, Belpex, EPEX, GME, Omel, NordPool) aimed at identifying a co-ordinated mechanism for the setting of the electricity price in such markets. The project is intended to lay the foundations for the creation of a real European energy market.

Prices 
In GME’s markets, prices are expressed in €/MWh, specified to the second decimal figure for the Electricity Market and to the third decimal figure for the gas market. On the P-GAS, prices are expressed in cents of €/GJ, specified to the fourth decimal figure on the imports and royalties segments, and in €/MWh, specified with three decimals in the segment as per Legislative Decree 130/10. On the PB-GAS, prices are expressed in €/MWh/day, specified with three decimals. All prices are rounded off under the commercial criterion.
- Check Price: price determined by GME for the purposes of adequacy verifications in the MTE.
- Check price of the MPEG. It means the parameter determined by GME in order of the adequacy verifications in the MPEG and whose definition criteria are identified in the Technical Rules.
- Clearing Price: it generally identifies the price that is set in the MGP, MI, MPL and MGS at the intersection of demand and supply curves, so as to balance demand with supply, maximise social welfare and perform efficient transactions. In the Electricity Market, the clearing price is determined in each hour and, if the market is split into 2 or multiple Zones, both in the MGP and in the MI, it may be different in each Market Zone (Zonal Price). In the MGP, the zonal clearing price may be applied to all supply offers, to demand bids in respect of mixed units and to demands bids in respect of consuming units belonging to Virtual Zones. Demand bids in respect of consuming units belonging to Geographical Zones are always valued at the National Single Price (PUN). In the MI, 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 q) 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 the available amount of financial guarantees.
- Maximum Price: maximum price of transactions carried out during a continuous-trading Session.
- Minimum Price: minimum price of transactions carried out during a continuous-trading Session.
- Price of the MPEG product means the price specified by the Participant in the submission of bids/asks and corresponding to:
o in the case of the "unit price differential" product, the expression of the incremental or decremental unit value than the average price referred to in Article 42, paragraph 42.2, subpara. c), of the Integrated Text of the Electricity Market Rules, which will be determined at the relevant periods included in the daily product type being offered in the MPEG;
o in the case of the product "at full unit price", the expression of the minimum unit value or the maximum one, to which the Participant intends to sell or buy the corresponding product.
- 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 bid/ask. Bids/Asks that are accepted in the Ancillary Services Market are valued at the offer price.
- Reference Price: average price referred to 1 MWh, weighted for the related Volumes, of all transactions executed during a market Session.
- Settlement price of the MPEG product. It means: in the case of " unit price differential" product, the algebraic sum of the product price and the average price referred to in Article 42, paragraph 42.2, subpara. c), of the Integrated Text of the Electricity Market Rules that determine at the relevant periods included in the daily product type being offered in the MPEG; in the case of "full unit price" product, the price of the product itself.
- Unconstrained Price:
virtual price determined when there are no Transmission capacity constraints.
- Zonal Price (PZ): clearing Price in each Geographical and Virtual Zone.

Price-Setting Operator 
- see Marginal Market Participant.

Price-Setting Operator Index 
- see Marginal Market Participant Index.

Price-Setting Technology Index 
- see Marginal Technology Index.

Primary capacity 
the annual and multi-annual regasification capacity as well as the current thermal year capacity available for allocation at each regasification terminal.

PSV 
Sistema per Scambi/Cessioni di Gas al Punto di Scambio Virtuale – modulo PSV (gas trading system at the Virtual Trading Point - PSV), referred to in AEEG’s Decision 22/04 and organised and managed by Snam Rete Gas.

PSV Code 
the code assigned by the company Snam Rete Gas to the Participant upon granting authorisation to access the gas trading system at the Virtual Trading Point – PSV.

PSV User 
a party authorised to operate at the PSV.

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.

PUN 
– see National Single Price.

PZ 
– see Prices.


Q
Quantities/Volumes 
for electricity markets: volumes of electricity covered by demand bids and supply offers. These volumes are expressed in MWh, specified with three decimals.
- Off-Exchange Volumes: volumes of electricity sold/purchased through Bilateral Contracts. On the supply side, they include: all OTC sales, net of the balance (if positive) between all OTC injection and Withdrawal Schedules registered onto the PCE. On the demand side, they include all OTC purchases, net of the balance (if positive) between all OTC withdrawal and Injection Schedules registered onto the PCE;
- Power Exchange Volumes (or On-Exchange Volumes): volumes of electricity traded by Market Participants in the Day-Ahead Market (MGP). On the supply side, they include: all the sales on the Power Exchange; the balance (if positive) between all OTC injection and Withdrawal Schedules registered on the PCE; and the balance (if positive) between the sales and the purchases recorded in the BSP Zone. On the demand side, they include: all the purchases on the Power Exchange; the balance (if positive) between all the OTC withdrawal and Injection Schedules registered on the PCE; and the balance (if positive) between the purchases and the sales recorded in the BSP Zone;
- Total Volumes (“Sistema Italia”): overall volumes of electricity traded in the “Sistema Italia”, equal to the sum of On-Exchange Volumes and of Off-Exchange Volumes;
- Unconstrained Volume: virtual volume determined when there are no Transmission capacity constraints;
- Volumes of “Scambio”: On-Exchange Volumes, net of purchases for Pumped-Storage Units and purchases on the Power Exchange, if any, by Neighbouring Countries’ Zones;


for gas markets and platforms: volumes of gas covered by demand bids and supply offers. These volumes are expressed as follows:
• in the MGAS, in MWh/day, specified with three decimals;
• on the P-GAS, in GJ in the imports and royalties segments and in MWh in the segment as per Legislative Decree 130/10;


R
RECOs (Renewable-Energy Certificates of Origin)
the Guarantees of origin referred to in AEEG’s Decision ARG/ELT 104/11 and issued by GSE before 31 March 2013.

Relative Volatility Index (IVR)
index of relative volatility of Prices. It measures the variability of the phenomenon in a given 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, 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.

Reserve price of the issued capacity 
the Reserve price given by the user who has issued the regasification capacity, which constitutes the minimum available price at auction, with respect to which the offers submitted by the participants are included in the order of merit or rejected for the purpose of auction.

Reserve price of the primary capacity 
the Reserve price given by each regasification company on the basis of the criteria defined by ARERA with a specific resolution, which constitutes the minimum available price at auction, with respect to which the offers submitted by participants on the PAR are included in the order of merit or rejected for the purpose of the auction.

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


RTN 
– see National Transmission Grid.


S
Scambio 
service that Gestore dei Servizi Energetici provided throughout the duration of Stage 2 as part of its electricity dispatching service; the service consisted in 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.

Secondary capacity 
regasification capacity issued by the user of the regasification and made available again by the same user to the regasification company for the purpose of a subsequent allocation.

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/receivables arising from the Electricity Market and from the Gas Market.

Sitting 
period of time within which Offers/Bids are to be received in order to be considered as valid.

Snam Rete Gas 
Snam Rete Gas S.p.A., a company established on 15 November 2000 to carry out activities of transport and dispatching of natural gas; Snam Rete Gas organises and manages the PSV system under AEEG’s Decision 22/04, as subsequently amended and supplemented.

Spot Contract 
a contract admitted to trading in the spot market and concerning the trading of spot supplies of electricity and natural gas.

Spot Electricity Market (MPE)
the set of the Day-Ahead Market (MGP), of the Intra-Day Market (MI), the Daily products market (MPEG) and of the Ancillary Services Market (MSD).

Spot Gas Market 
the regulated gas market, consisting of the Day-Ahead Gas Market (MGP-GAS) and of the Intra-Day Gas Market (MI-GAS).

Stage 1 
period of market trading tests, which preceded the take-off of the Power Exchange. It ended on 30 March 2004.

Stage 2 
period of operation of the Power Exchange characterised by a transitional system of demand management, in which final customers or their Wholesalers could not submit demand bids into the Power Exchange or report hourly Withdrawal Schedules (the so-called “Scambio”). In this stage, Gestore dei Servizi Energetici daily purchased on the Power Exchange the Volumes required to cover the National Demand estimated for the next day, in each hour and in each Zone, and resold such Volumes both to AU (for Captive Customers and to Eligible Customers at the monthly average price, differentiated by Hourly Bands, applied to the difference between their actual consumption and the planned value of the sales to such customers under Bilateral Contracts. This Stage ended on 31 December 2004.

Stage 3 
period of operation of the Power Exchange in which the demand side fully participates in the Power Exchange, by submitting demand bids, and enters into Bilateral Contracts, by nominating hourly Withdrawal Schedules. In this stage, the electricity purchased on a scheduled basis is valued at the hourly purchasing price, for purchases on the Power Exchange, and at the price specified in Bilateral Contracts, for purchases off the Power Exchange. Conversely, the electricity consumed or not consumed (i.e. deviating from hourly schedules) is valued on the basis of Unbalancing charges. This period began on 1 January 2005.

Standard-Offer Market (“servizio di maggior tutela”) Customers  
since 1 July 2007, all household customers and small companies, having all of their withdrawal points connected at low voltage, have become entitled to participate in this market.

Supply Curve  
segment of line on the volume-unit price plane, which refers to an Applicable period and which is obtained by cumulating Supply Offers verified to be technically adequate and ranked by non-decreasing unit price order.

Supply Point 
– see Offer Points.

Supply Point for Injection 
– see Injection Point.

Supply Point for Withdrawal 
– see Withdrawal Point.


T
TEE 
– see Energy Efficiency Certificates.

TEE Register 
database of Energy Efficiency Certificates managed by GME and divided into ownership accounts.

TEE relevant monthly price of bilateral transactions 
relevant monthly price of Bilateral transactions means: i. the average price for a tpe, weighted by the related Volumes of the Bilateral transactions concluded during the corresponding calendar month, at a price below 250€/TEE and not excluded from the interval between the value referred to in paragraph 3.2, subpara. a), and the value referred to in paragraph 3.2, subpara. b) of Article 3 of Annex A to Resolution 487/2018/R/efr, with a dimensionless parameter ? equal to the value referred to in paragraph 3.3 of the same article; or ii in the event that the relevant monthly volume is zero, respectively:
  • the value referred to in paragraph 3.2, subpara. a), of Article 3, of Annex A to Resolution 487/2018/R/efr, with a dimensionless parameter ? equal to the value referred to in paragraph 3.3 of the same article, if more than half of the Volumes covered by Bilateral transactions have been concluded at a lower price than the one referred to in the same paragraph 3.2, subpara. a), of Article 3, of Annex A to the resolution 487/2018/R/efr;
  • the value referred to in paragraph 3.2, subpara. b) of Article 3, of Annex A to the resolution 487/2018/R/efr, with a dimensionless parameter ? equal to the value referred to in paragraph 3.3 of the same article, if more than half of the Volumes covered by Bilateral transactions have been concluded at a price higher than that referred to in the same paragraph 3.2, subpara. b) of Article 3, of Annex A to Resolution 487/2018/R/efr;
  • the average of the values referred to in paragraph 3.2, subpara. a) and b) of Article 3, of Annex A to the resolution 487/2018/R/efr, with a dimensionless parameter ? equal to the value referred to in paragraph 3.3 of the following paragraph of the same article, if half of the Volumes covered by Bilateral transactions have been concluded at a lower price and half of the Volumes involved in Bilateral transactions have been concluded at a higher price, respectively those referred to in the same paragraph 3.2, subpara. a) and b), of Article 3, of Annex A to Resolution 487/2018/R/efr.

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%.

Terna S.p.A. 
- see Terna - Rete Elettrica Nazionale SpA.

Toe  (tonne of oil-equivalent)
conventional unit used in energy accounting to express all the energy sources (taking into account their calorific value) in a common unit of measurement.

Trading Period 
period during which Forward Contracts are traded.

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 Limits (or Transit Limits)
maximum electricity Transmission capacity between a pair of Zones; it is expressed in MWh. The Transmission limits are part of the Preliminary Information that Terna S.p.A. daily notifies to GME and that GME posts on its website. GME uses these limits for Market Resolution in the Day-Ahead Market and Intra-Day Market.


U
Unbalancing 
- see Deviations/Imbalances.

Unbalancing charges 
- see Balancing Charges.

Unconstrained 
virtual price or volume which is defined when there are no Transmission constraints

User admitted to MGS 
User admitted to MGS shall mean the MGAS Market Participant admitted to one or more storage companies.

User admitted to MPL 
User admitted to MPL shall mean the Market Participant authorized by Snam Rete Gas to submit Bids/Offers regarding the Offer Points in his/her/its possession


V
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).

Volumes/Quantities 
– see Quantities/Volumes.


W
White Certificates 
– see Energy Efficiency Certificates.

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 take-off of the Power Exchange, the value of the PGN was administratively set by AEEGSI 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 
any natural person or legal person buying and selling electricity with a view to reselling it inside or outside the system where he/she/it is established.

Withdrawal Schedules 
volume of energy to be withdrawn from the grid/network on the day, in the hour and at the Offer Point to which the schedule refers.


Z
Zone 
portion of the power grid where, for system security purposes, there are physical limits to transfers of electricity to/from other Geographical Zones. The Zones are defined by TERNA SpA and approved by ARERA. At present, the zones 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 or Pole of Limited Production"). It includes: Rossano (ROSN);
  • Foreign Virtual Zone: point of interconnection with neighbouring countries. It includes: France (FRAN), Switzerland (SVIZ), Austria (AUST), Slovenia (SLOV), Slovenia Coupling representing the interconnection dedicated to Market Coupling between Italy and Slovenia (BSP), Corsica (CORS), Corsica AC (COAC), Greece (GREC), France coupling representing the interconnection dedicated to Market Coupling between Italy and France (XFRA), Austria coupling representing the interconnection dedicated to Market Coupling between Italy and Austria (XAUS), Malta (MALT), Switzerland coupling representing the interconnection dedicated to Intraday Market Coupling between Italy and Switzerland (XSVI).;
  • 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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