ESF EXAM RELEVANT VOCAB FROM LIST Flashcards
Decoupling (6)
Refers to the decoupling of economic growth from energy demand
Peak shaving (6)
Reducing peak energy requirements through the shifting of small load
energy application
(FROM LECTURE)
Interruptible tariff (6)
Lower tariff paid by certain electricity consumers as they can be called upon to reduce load during peak periods
Economic demand response (6)
Demand response programs that pay customers to reduce load when usage is high (NOT FROM CHAPTER)
Direct load control (6)
Type of demand response, whereby the utility has direct control over demand/devices of a customer to regulate load and compensates the customer for it, mostly used in the residential sector (FROM LECTURE)
Response time (6)
How quickly the device can accept or deliver electricity
Ancillary services (6)
Energy of capacity services necessary to support electricity transmission and ensure reliability of energy supply
Examples: >Frequency regulation >Voltage control >Spinning reserves >Operating reserves >Failure protection - incl blackstart capability
Merchant power (6)
Power generated and sold into the wholesale market
Jevons paradox or rebound effect (6)
Paradox that as technology progresses and efficiency in the use of a resource increases, the rate of consumption of that resource will increase as well
Energy service companies (ESCOs) (6)
Companies offering a varietyy of energy solutions, which may include:
>provision of devices/equipment,
>identification and assessment of energy use patterns,
>access to financing
>project execution
>ongoing monitoring and operation
Premium efficiency investments (6)
Efficiency investment cost portion of total device costs needed to achieve energy efficiency improvements (would be more accurate way of constructing total investment numbers)
Demand response (6)
When customers act upon energy opportunities or incentives (e.g. investments, behavioural change, response to price incentives), which yield high expected returns
Warranties (5)
Tool to mitigate operation risk provided by the component supplier
Assures the good condition of the product/service supplied and states that the supplier is responsible for repairing or replacing a product during a certain period of time after the purchase (NOT FROM BOOK)
Power purchase agreement (PPA) (4)
Agreement delineating the payment terms for services provided
Weighted average cost of capital (WACC) (4)
Weighted average cost of debt and equity that an asset owner uses to fund investments, which tends to be stable across fungible projects
Approximates the overall risk that the market perceives in the investment itself, but may ignore risks that do not directly bare on the project/can be shifted to counter parties
Internal rate of return (IRR) (5)
Method for evaluating projects based on expected inflows and outflows of a project, which is compared to the internal hurdle rate to determine whether a project will create value
Sponsor (5)
Organisation that holds the equity in a project under project financing and often puts up a substantial portion of equity in the form of upfront risk and “sweat equity”
Can be the organisation putting up the initial risk capital, the developer of the asset, the vendor of the equipment of other stakeholders who control the completion of the project
Project finance or off-balance-sheet finance (5)
Flexible financial structure, allowing the asset to be carved out into a separate entity and financed on its own merits
Fukushima risk (4)
Low-probability, high-impact risk that must be considered in the deployment of any risky technology
Merit order (4)
Prioritisation of lowest cost electricity
Market clearing price (4)
Price at which all profit and benefit opportunities are realised and supply equals demand
Marginal cost (4)
Cost to produce one more or one less unit of something
Levelized cost of electricity (LCOE) (4)
sum of all cost elements involved in the creation, operation, and fueling of an assets (using a consistent basis) divided evenly over output of the asset
Components:
- Overnight cost
- Fixed O&M
- Variable O&M
- Fuel cost
Discount rate (4)
Rate applied to enable the comparison of cash flows occurring in different periods
(ANYONE FIND A BETTER DEFINITION - BOOK DOESN’T REALLY DEFINE IT)
Capacity markets (4)
Markets where forward capacity 3+ years out can be bought and owners of generators can get contracts to sell capacity at a future date
Capacity factor (4)
utilisation rate
OR
Percentage of time the asset is operating at maximum capacity/rate
Heat rate (4)
Rate at which energy in fuel is converted into kWh or in other words how much of energy put in (in the form of fuel) comes out
Variable O&M (4)
Operating and maintenance costs associated with maintaining the plant
Fixed O&M (4)
Operations and maintenance costs required to keep the asset at full operating capacity, before it is used to produce the first unit of output
Includes: site maintenance, staffing, operating repairs, cleaning, and maintenance expenses
Overnight cost (4)
Cost of completing the generation asset and putting it into service as if it were to happen instantaneously
OR
Cost incurred up until the moment the builder transfers ownership of a newly constructed generator to the operator
Stranded Costs
Cost for stranded assets, i.e., assets, that suddenly became uneconomic or are no longer needed. Often difficult to recover.
Busbar costs (4)
Cost of electricity from generation up until it reaches busbar to enter the grid
Busbar (4)
Substation connection device where electricity is available for transmission and enters the grid (made of out conductive material e.g. copper)
Wholesale market (4)
Organized electricity market where grid operators or large industrial clients can procure electricity from generators (usually in large quantities)
Supply stack (4)
Aggregation of all bids not the wholesale market ordered from lowest marginal cost to highest marginal cost (same as bid stack, but can be border and expand beyond the electricity market)
Organised (wholesale) market (4)
market structure that is characterized by being “bid-based, security-constrained, economic dispatch with nodal prices”
Bid stack (4)
All generation capacity bid into the wholesale market ordered from lowest to highest marginal cost (merit order) in the electricity market.
Load duration curve (4)
Illustrate the relationship between generating capacity requirements (y-axis) and capacity utilization (x-axis - e.g. in % of hrs per year) and shows the needed capacity utilization for each load level
Load is ordered from highest to lowest starting from the left.
Height of each “slice” represents capacity
Width of each “slice” represents capacity factor
(NOT FROM CHAPTER)
Credit rating (4)
Assessment of the credit worthiness of a borrower in general or in respect to a particular debt/financial obligation (NOT FROM CHAPTER)
Fungibility (4)
Property of being mutually substitutable, which is characterized by 4 factors: >What >When >Where >How certain
Rate case (4)
Formal process conducted by utility regulators to determine if the base rates charged by a utility are just an reasonable
Prime mover (4)
Machines that are used to transfer primary kinetic and potential energy sources into directed and concentrated forms to produce mechanical work (Ch. 1)
OR
a machine, as a water wheel or steam engine, that receives and modifies energy as supplied by some natural source.
(NOT FROM CHAPTER)
Induced Seismicity (4)
Earth quake activity resulting form human activity that causes a rate of energy release (seismicity) which would be expected beyond the normal level of historical seismic activity - in the context of energy may be caused e.g. by fracking, geothermal, etc.
Emissions (4)
Production or discharge of something - usually gas (NOT FROM CHAPTER)
Run-of-river (4)
Hydropower plant without/with limited storage, making subject to fluctuations in river flows (e.g. seasonal) and thus intermittent
Combined heat & power (CHP) or cogeneration (4)
Generation of both electrical power and useful thermal energy, through the recovery of otherwise-wasted thermal energy to produce useful thermal energy or electricity (NOT FROM CHAPTER)
Reprocessing (4)
in the context of nuclear energy:
Refers to the processes necessary to separate spent nuclear reactor fuel into material that may be recycled for use in new fuel and material that would be discarded as waste (from NRC)
LCOE unsubsidized (4)
LCOE only considering the 4 cost components, excluding any subsidies (e.g. FIT, carbon pricing, etc.)
LCOE subsidized (4)
LCOE taking into account subsidies e.g. carbon price
Flood control (4)
Methods of reducing or preventing negative impacts of flooding - in the context of energy refers to e.g. the ability of hydropower to act as flood control through the creation of a dam
Project finance waterfall (5)
Represents the order in which obligations are met when revenues are received. Project revenues go from
1) revenue acct to
2) construction and operating acct (to pay construciton & operating expenses)
3) debt payment acct (to pay fees, interest, schedules principle)
4) debt service reserve acct (to maintain required debt service reserve level)
5) major maintenance reserve acct (to maintain required major maintenance reserve level)
6) subordinated debt acct (to pay subordinated debt)
7) distribution acct (to be distributed to equity holders)
Accelerated depreciation (5)
Several methods used to depreciate fixed assets at a higher rate during earlier years of the asset’s life. (NOT FROM CHAPTER)
Investment tax credit (ITC)
The Investment Tax Credit (ITC) reduces federal income taxes for qualified tax-paying owners based on capital investment in renewable energy projects (measured in dollars).
Production tax credit (PTC)
The Production Tax Credit (PTC) is a federal incentive that provides financial support for the development of renewable energy facilities.
Nominal interest rate
Interest rate before taking inflation into account
Real interest rate
Interest rate adjusted for inflation
Off-taker
Customer
Risk-adjusted costs
Cost of electricity taking into account potential market risks (e.g. fossil fuel price volatility, capital risk (through discount rate), fluctuating O&M costs,etc.)
Debt service coverage ratio (5)
Tool to evaluate likelihood of repayment
Determines how many periodic debt repayments to lenders the company can cover with cash
Fixed charge coverage ratio (5)
Tool to evaluate likelihood of repayment
Determines how much cash flow is available relative t the fixed charges (i.e. tax payments and other mandatory payments)
Construction finance (5)
Financing covering the cost of land development and construction usually released a) as needed, b) as each stage is completed, c) accd to pre-arranged schedule, d) when conditions are met
(NOT FROM CHAPTER)
Equity (5)
Amount of fund on balance sheet contributed by owners OR one of the principal asset classes for investment (stocks)
(NOT FROM CHAPTER)
Debt (5)
Money owed to a third party e.g. bonds, loans, commercial papers
Engineering, procurement, and construction agreement (EPC) (5)
Agreement containing warranties, schedules, performance guarantees etc to reduce the related construction risk for project finance lenders if the project is not yet fully constructed
Energy efficiency (6)
Energy efficiency = energy in/energy out
doing more with less
Frequency regulation (6)
Regulation and maintenance of grid specific frequency (usually 50 or 60 Hz)
Voltage control (6)
Regulation and control of voltage (has to be maintained with a very tight range)
Spinning reserve (6)
Generation reserves required to be available and able to provide rapid replacement in case of unexpected loss of generation capacity
Operating reserves (6)
Reserves required to ensure that sufficient assets are in place to meet the needs of customers
Failure protection (6)
Plans to respond to potential system failures to minimise cascading effects, incl. requirement for a portion of assets to have blackstart capability (=allows assets to start running without external power supply, which can then be used to restart other assets)
Load leveling
Buying of cheaper power in off-peak times to reduce variance in the load curve
Energy application
Load shifting
Use of storage to shift the load to off-peak times (charging storage in off-peak und distributing energy at peak times)
Energy (1)
Energy is the element that we are examining and have defined as the ability to do work. Whether kinetic or potential, there is an amount of energy available in the system that can perform the work when properly directed. This is the same energy that is neither created nor destroyed once it is in the system. It is a total volume (or stock) of energy available to do work.
Energy Services (1)
Energy Services are supplied through devices that use energy that are necessary to sustain our well-being and our way of life.
System (1)
An interconnected set of elements that is coherently organized in a way that achieves something (From Thinking in Systems)
Systems Thinking (1)
Systems Thinking is a way of thinking about, and a language for describing and understanding, the forces and interrelationships that shape the behavior of systems. This discipline helps us to see how to change systems more effectively, and to act more in tune with the natural processes of the natural and economic world. Marginal Analysis is the opposite, which holds all but one variable constant.
Root Cause (1)
Looking at system dynamics allow us to go deeper into the relationships of a given system and identify the root cause of why something is happening.
Leverage Points (1)
because systems are interconnected, any point can be affected by many others. Not all of these will have an equal effect as the strength of the transformations may vary, particularly across a number of relationships or structural elements. Identifying where small efforts in one part of the system can create major change in other parts of the system allows for the observation of leverage points.
Constraint (1)
A Constraint is a limiting factor or scarcity in a system that forces people to make allocation decisions with their limited resources. Whether using a cost-benefit relationship, a return on investment, or a net benefit (benefits minus cost), people are going to try to produce the most benefit for each unit of the scarce resources they have to work with. Types of Constraints: Scarcity, Supply, Capital, and Demand.
Sustainability (1)
This is our ability to sustain our way of life on Earth without destroying the natural environment and making it inhabitable for generations yet to come. There is a strong correlation between economic growth and the degradation of the environment. Stakeholders in the sustainability debate: Environment, Social, Economic.
Innovation (1)
Innovation is the ability to create and invent new technologies and opportunities at all levels of constraint in the energy system.
Depletion (1)
The investments that we make in infrastructure to transform energy through the system begins to deteriorate as soon as it is installed. Depletion is a very normal economic behavior whereby we minimize costs first, but that uses up a scarce opportunity that may not necessarily be replaced or renewed. There is a fundamental tension between innovation and depletion in the Energy System.
Power (1)
Power is the rate at which energy is physically transformed. The specific dimensions of transformation will be discussed below, but understanding power as a rate of change distinct from the energy that is being transformed will substantially clarify understanding of what is occurring across the energy supply chain. Power is a rate of flow in the system, corresponding to a rate of change of energy. Power is denominated as an instantaneous rate of transformation of energy.
Mathematically, Energy=Power*Time.
Energy is a stock (kWh) measured in Volume while Power is a flow (kW) measured in Rate.
First law of thermodynamics (1)
The First Law of Thermodynamics suggests that all of the energy that enters a closed system must remain in that system as energy, heat, or work produced. Thinking about a single step in the system, the energy input must create either the desired work (useful energy) or be wasted, and they must sum to the total energy input.
Auctions (1)
Auctions are the rules by which trade or exchange happens within a market. Every process that involves multiple buyers or sellers must have some set of auction rules to conduct the process, but there are a few dimensions across which auction mechanisms can be divided to explain their mechanisms.
Clearing price (1)
In an English Auction, bidders continue to bid until they are no longer willing to go any higher. The winning bid becomes the Clearing Price.
Cost and Value (1)
Costs are all the expenses that a producer has to pay to deliver their good or service end of market; In terms of supply chain dynamic, raw materials incur costs throughout the transformation and processes that they undertake through the supply chain. These costs accrued are delivered to the customer during final consumption. Value is determined by the consumer, it is the amount of benefit the consumer receives form the purchase or use of the good or service; consumers are always trying to maximize their bang for their buck.
Energy transformations (1)
Energy transformations make up a huge part of the energy supply chain at seven distinct stages.
1) Exploration for and discovery of the primary source – Making energy accessible to the supply chain
2) Production or harvesting the energy – Bringing it into the supply chain
3) Preparation, transport, or storage – Gathering and concentrating the energy for efficient use
4) Further processing, purification, and conversion – changing the nature of the energy to be useful in creating specific work outputs with specific devices
5) Distribution – transporting the energy to its eventual point of use
6) Utilization – using the energy to do work
7) Recovery, destruction or decontamination, or storage of by-products and waste – dealing with any undesirable effects of the energy transformations.
Final energy service (1)
The final energy service is what the energy produced and transformed multiple times is finally used for such as a light or toaster or computer, etc… As much as 90% of energy is lost when energy finally reaches the intended consumer.
Intellectual capital (1)
More esoteric but no less vital, the ability to deploy capital requires a certain amount of knowledge and technology, or intellectual capital, to make it effective. Owners of intellectual capital, whether through acquired knowledge and experience such as trade skills or intellectual property (IP) protection for devices and chemistries, expect to receive a fair return on their contributions to enabling the transformations of energy.
Physical capital (1)
This is the type of capital that most people first imagine when discussing capital for transforming energy. It includes all of the infrastructure items above and any other hard assets that are necessary for the procurement, transformation, or disposition of energy as it moves through the supply chain. Whether concrete pilings or computer banks, these assets are physical capital.
Human Capital (1)
Even when all of the hard and soft assets are ready, the transformations require the input of people to complete them. This human capital must be encouraged to participate in the process through adequate wages and working conditions versus the other options people may have to put their talents to work. If not, the transformations will be harder or impossible.
Natural Capital (1)
In addition to the energy sources that are brought into the energy supply chain, there are many other endowments of natural capital that are necessary for the complete functioning of the energy system. These include water availability, raw materials like metals and elements, land for growing crops, etc. As long as these are available, transformations can continue. However, constraints on cost or availability of this natural capital can have spillover effects on energy availability. Conversely, tapping into vast new sources of natural capital has the potential to create profound economic and welfare opportunities.
Political capital (1)
Being able to transform energy is not the same as being allowed to transform energy. In modern societies, government structures have emerged to allocate scarce resources and regulate behaviors of those engaged in vital industrial activity. Having rules in place to permit or encourage certain transformations, as well as the ability to protect those authorities from interference by others, is a type of political capital.
Transformations (1)
There are 4 dimensions of transformation:
- What - changing what form the energy is in
- Where - moving energy from where it is to where people may find it more useful
- When - providing energy when needed and storing it when not
- How Certain - how sure an energy source will be available when desired
Second law of thermodynamics (1)
The Second Law of Thermodynamics expands on this understanding of energy in a closed system by suggesting that in most of the transformations of one type of energy to another, the heat byproduct is lost, or rendered useless. Through a process of constant diffusion from hotter to colder areas, also known as entropy, this heat becomes more diffuse, disorganized, and difficult to recapture and harness into productive work. The drive toward concentration and efficiency of energy conversion is perpetually fighting against this force of entropy. When scaled up to the system level, these two Laws suggest that the entire energy system is bounded by the amount of energy that enters it, with that primary energy staying in the system as either useful energy (“work”) or energy loss.
Price (1)
Price– Value - Surplus = Price = Costs + Profits
Fungible Good (1)
Fungible Good– to be fungible, two things must share identical characteristics of what they are, where they are available, when they are available, and the certainty of each of those other characteristics.
Lifecycle analysis (LCA) (1)
Total costs for a power plant or generator including resource extraction, fuel processing, manufacturing, construction, operations, maintenance, waste management, and decommissioning.
Batteries (7)
All of the different ways that potential energy can be stored in various types of chemical bonds, formed into electro-chemical control devices.
Primary battery (7)
Primary batteries are constructed of anodes, cathodes and electrolytes in a way to allow them to emit a charge. They cannot be recharched.
Secondary battery (7)
Allows for chemical reaction in the battery to be reserved by the application of current back in the battery, which recharges the chemistry and therefore electrical energy available from it (also: researchable battery).
Grid storage (7)
Storage devices that are installed for the primary purpose of supporting the function of the electric grid.
Pumped hydro (7)
Type of mechanical storage. Either fresh or salt-water can be pumped (using electricity) to a higher elevation, and stored in some reservoir for later use. When energy is required, the water can be run through a turbine to generate electricity.
Stationary vs portable storage (7)
Stationary storage refers to a fixed location; portable refers to movability.
Fuel Cell (7)
A device that converts the chemical energy from a fuel into electricity through a chemical reaction with oxygen or another oxidizing agent. (not from class material)
Energy Density (7)
Ability to store energy per-unit (the general definition in the book refers to -> Volume Energy Density, i.e. per unit of volume)
A type of energy content measurement
Weight Energy Density (7)
Ability to store energy per-unit of weight (not explicitly mentioned in course materials)
Volume Energy Density (7)
Ability to store energy per-unit of volume (also: volumetric energy density)
Specific energy (7)
The amount of energy that can be stored in the device or system per unit of mass (also gravimetric energy density).
A type of energy content measurement.
