Glossary
Accident Frequency Rate (AFR)
The number of Lost Time Accidents (LTAs) divided by the number of
hours worked, multiplied by 100,000.
Annual General Meeting (AGM)
Annual General Meeting of shareholders of the Company.
Asset-backed trading
The selling of the electricity generated and fuel used by our power
stations.
Availability
A measure giving the proportion of electrical energy that was
actually available to be generated during the period, after taking
account of both planned and unplanned outages, expressed as a
percentage of the maximum potential electrical energy
generation.
Bond
Financial instrument that obligates the issuing company (the
borrower) to make specified payments to the holder (the
lender).
Brownfield
An area of land that has previously been developed, such as the
site of a demolished building.
Call option
An option to buy a security at a pre-determined price.
Capacity (installed)
Generator capacity (measured in megawatts), usually indicated on a
nameplate physically attached to the generator.
Combined cycle plant
Combined cycle gas turbine (CCGT) – the combination of a gas
turbine (GT) and steam turbine (ST) in a configuration that enables
electricity to be generated directly from a generator driven by the
GT and, by using exhaust gases from the GT to produce steam, a ST
coupled to the same generator or another generator.
CEO
Chief Executive Officer.
CFO
Chief Financial Officer.
CO2
Carbon dioxide.
Cogeneration
The simultaneous generation of electricity and heat in the form of
steam, typically where the need for both arises for industrial or
commercial purposes and where the steam is generated by utilising
the waste heat from electricity generation.
Combined Code
The Code which sets out the expected corporate governance standards
for companies listed on the London Stock Exchange.
Corridor approach
Under this approach to recognising surpluses and deficits in
defined benefit pension plans, actuarial gains and losses are not
recognised immediately. Only when the cumulative gains or losses
fall outside the corridor is a specified portion recognised in the
income statement from the following year onwards. The corridor is
10% of the present value of the pension rights accrued or of the
fund assets at market value, if greater.
CR
Corporate responsibility.
CSR
Corporate social responsibility.
Dark spread
The difference between the cost of coal to generate electricity and
the price at which electricity is sold.
Debt capitalisation
Net debt divided by the sum of the net debt and total equity.
Demerger
The process whereby National Power split its UK and international
operations (International Power) into separate businesses.
Desalination plant
Plant which produces drinking water from sea water.
Due diligence
A process undertaken before the acquisition of a business to ensure
all significant risks, rewards and issues are identified and
considered before any offer is made to the vendor or an acquisition
takes place.
Emission allowances
Under various environmental schemes, emission allowances are
required to cover the amount of relevant emissions made by a power
station. Cap and trade schemes are a common type of scheme. Under a
cap and trade scheme, operators are required to purchase sufficient
emission allowances to cover their actual emissions, and the
operator may or may not be granted an initial volume of allowances.
Examples of such schemes include the EU Emissions Trading Scheme
(EUETS) which covers emissions of CO2, based on a cap and trade
system. Other examples include the Clean Air Act in the US which
covers emissions of NOx and SOx.
EPC contract
Engineering, procurement and construction contract, used
principally for the building of power stations by a turnkey
provider.
EPS
Earnings per share. It is calculated by dividing the profit after
interest, tax and minority interests by the weighted average number
of Ordinary Shares in issue.
ERCOT
Electric Reliability Council of Texas – responsible for
managing the Texas generating and transmission systems.
ETS
Emissions trading scheme – programme for the trading of
emissions permits relating to CO2 output.
EUETS
European Union Emissions Trading Scheme.
FGD
Flue gas desulphurisation – a process which removes sulphur
from the flue gas emissions of a coal plant.
Forced outage rate
A measure giving the proportion of electrical energy that was
actually unavailable for generation during the period, after taking
account of planned and unplanned outages, expressed as a percentage
of the maximum potential electrical energy generation.
Fossil fuel
It is generally accepted that fossil fuels are formed from the
fossilised remains of dead plants and animals by exposure to heat
and pressure in the earth’s crust over hundreds of millions
of years. They are found within the top layer of the earth’s
crust and range from very volatile materials with low carbon to
hydrogen ratios like methane, to those with high carbon to hydrogen
ratios like liquid petroleum. They also include non-volatile
materials composed of almost pure carbon, like anthracite coal.
Fossil fuels are non-renewable resources because they take millions
of years to form.
Functional currency
The currency of the primary economic environment in which the
entity operates.
Gearing
Net debt as a percentage of total equity.
Generator nameplate capacity
The maximum output of a generator, under specific conditions
designated by the manufacturer.
Greenfield land
A piece of undeveloped land, either currently used for agriculture
or just left to nature.
Grid (the)
The electricity transmission network.
GSA
Gas supply agreement.
GT
Gas turbine.
GW
Gigawatt, one thousand million watts.
Gigawatt hour (GWh)
A watt hour is the amount of energy used by a one-watt load, such
as a small light bulb, drawing power for one hour. The
kilowatt-hour (kWh) is 1,000 times larger than a watt-hour and is a
useful size for measuring the energy use of households and small
businesses and also for the production of energy by small power
plants. A typical household uses several hundred kilowatt-hours per
month. The gigawatt-hour (GWh) is 1,000,000 times larger than the
kilowatt-hour and is used for measuring the energy output of large
power plants.
Hedge contracts
A contract that gives protection against risks of future price
movements.
Heat recovery steam generator (HRSG)
Used in Combined Cycle Plants.
HS&E
Health, safety and environment.
HUBCO
The Hub Power Company.
IASs
International Accounting Standards.
IASB
International Accounting Standards Board.
ICOM
Investment Committee.
IFRSs
International Financial Reporting Standards.
IPO
International Power Opatovice A.S. (a subsidiary in the Czech
Republic which provides power and district heating to the city of
Prague).
IPP
Independent power producer.
ISO 14001
The international standard of environment management systems.
Joule
A measure of energy (work done), the ability to generate one watt
for one second.
KAPCO
The Kot Addu Power Company.
KPI
Key performance indicator.
kW
Kilowatt – 1,000 watts.
Kilowatt hour (kWh)
A watt hour is the amount of energy used by a one-watt load, such
as a small light bulb, drawing power for one hour. The
kilowatt-hour (kWh) is 1,000 times larger than a watt-hour and is a
useful size for measuring the energy use of households and small
businesses and also for the production of energy by small power
plants. A typical household uses several hundred kilowatt-hours per
month.
Kyoto Protocol
A protocol to the International Framework Convention on Climate
Change with the objective of reducing greenhouse gases in an effort
to prevent anthropogenic climate change.
LCPD
Large Combustion Plant Directive.
LDs
Liquidated damages, being a reasonable pre-estimate of loss
specified in a contract, payable if one party breaches one part of
a contract.
LNG
Liquefied natural gas.
Load factor
The proportion of electricity actually sold, compared with the
maximum possible sales of electricity at maximum net capacity.
Lost Time Accident (LTA)
24-hour absence from work.
Letter of Credit (LoC)
A credit facility provided by a bank.
M&A
Mergers and acquisitions.
Mark to market
The act of attributing a fair or market value to a financial
instrument rather than its historical cost. Marking to market is
required under accounting rules for certain derivatives and
financial instruments.
Merchant market
A merchant market is a deregulated market. It is a market in which
electricity is bought and sold competitively by multiple market
participants.
Merchant plant
Our merchant plants operate in deregulated markets selling power
into the traded market without long-term Power Purchase Agreements
(PPAs).
MIGD
Millions of imperial gallons per day.
MISO
Midwest Independent System Operator.
Mitsui
Mitsui & Co. of Japan.
Mothball
To temporarily suspend operation at a project in such a way that it
can be returned to service in the future.
MoU
Memorandum of understanding.
MW
Megawatt; one MW equals 1,000 kilowatts or one million watts.
Megawatt hour (MWh)
A watt hour is the amount of energy used by a one-watt load, such
as a small light bulb, drawing power for one hour. The
kilowatt-hour (kWh) is 1,000 times larger than a watt-hour and is a
useful size for measuring the energy use of households and small
businesses and also for the production of energy by small power
plants. A typical household uses several hundred kilowatt-hours per
month. The megawatt-hour (MWh) is 1,000 times larger than the
kilowatt-hour and is used for measuring the energy output of large
power plants.
MWth
One megawatt of thermal power, which is used to measure heat.
National Allocation Plan
The Plan issued under the EU Emissions Trading Scheme that sets out
how greenhouse gas emission allowances will be allocated to
affected industry sectors and the carbon-producing assets within
the relevant sector.
NEPOOL
New England power pool.
Non-recourse debt
Debt secured on an asset, and where the lender has no recourse to
the shareholder.
NOx
Oxides of nitrogen.
NPV
Net present value, being the value of an asset calculated by
reference to its future cash flows.
O&E
Operations and Engineering.
O&M
Operations and maintenance, usually used in the context of
operating and maintaining a power station.
OCGT
Open cycle gas turbine – turbines, typically fuelled by gas
or diesel oil, are used to drive the generators to produce
electricity, with no use of the waste heat for subsequent power
generation.
Offtake agreement
Power purchase agreement between a company owning a power station
and its customer (the offtaker) whereby the customer takes the
electricity generated by a power station.
OHSAS 18001
Occupational Health and Safety Assessment Series 18001. A
management system specification, developed by British Standards
Institute which is now an accepted international standard, for
health and safety which is compatible with ISO 9001:1994 (Quality)
and ISO 14001:1996 (Environmental) management.
OPERA
Operating plant engineering risk assessment, an internally
developed tool for assessing engineering risk at assets.
OSA
Oil supply agreement.
Outage
When a generating unit is removed from service to perform
maintenance work. This can either be planned or unplanned.
Peak load
The maximum demand for electricity during a specified high demand
period. This may require use of plant (for example pumped storage)
that is kept in reserve for peak periods.
Peaking plant
Plant that runs only in times of short supply (normally during peak
demand), when prices are high.
PJM
Pennsylvania, New Jersey and Maryland power pool.
Power Purchase Agreement (PPA)
See also Offtake agreement. A PPA is generally a long-term contract
between an electricity generator and a purchaser of energy or
capacity (power or ancillary services).
Proprietary trading
The trading of commodities for the purposes of making a profit,
when the commodity, such as electricity, is not generated by our
own power stations or purchased for use by our own power stations,
also known as non-asset backed trading.
Pumped storage
A method of energy generation that involves moving water between
reservoirs at different elevations. When electricity prices are
low, typically overnight, electricity from the grid system is used
to pump water into a raised reservoir and then at times of peak
demand, when electricity prices are higher, the water is released
back into the lower reservoir through a turbine.
Put option
An option to sell a security back to the issuer at a pre-determined
price.
PWPA
Power and water purchase agreements.
Recourse debt
Debt where the lender has recourse to parties other than the
borrower, usually a parent company or shareholder.
Reserve margin
The amount of available plant reserve capacity above the
system’s peak electricity requirements.
RGGI
Regional Greenhouse Gas Initiative, a US regulation towards carbon
emission reduction in ten north eastern states.
RPI
Retail Price Index.
SCR
Selective catalytic reduction – equipment to reduce the
content of oxides of nitrogen in flue gases.
SO2
Sulphur dioxide.
SOx
Oxides of sulphur.
Spark spread
The difference between the gas cost to generate electricity and the
price at which electricity is sold.
Spot price
Market price at a particular point in time.
Spread
The difference between the fuel costs to generate electricity and
the price at which electricity is sold.
Technical availability
A measure giving the proportion of electrical energy that was
actually available to be generated during the period, after taking
account of both planned and unplanned outages, expressed as a
percentage of the maximum potential electrical energy
generation.
Tolling agreement
A form of long-term electricity contract where the buyer of
electricity also supplies the fuel and the generator provides plant
and operational services.
TSR
Total shareholder return.
Turnkey contract
A contract where one party takes full responsibility for the
construction and commissioning of a plant, delivering the plant in
full working order to the owner.
Turnbull Guidance
The Turnbull Guidance expands upon the Combined Code requirements
for the Directors’ review of the effectiveness of the
Group’s system of internal controls.
UAE
United Arab Emirates.
US Sarbanes-Oxley Act
The Sarbanes-Oxley Act of 2002 was enacted in reaction to the
highly publicised bankruptcies of Enron and WorldCom and is
concerned with strictly enforcing corporate governance and
financial disclosure.
Watt
Unit of power, which is the rate at which energy is delivered (i.e.
work is done at a rate of one watt when one ampere flows through a
potential difference of one volt).
