Glossary of Energy Market Terms

Base load: Base load is the basic required capacity at all times. This is covered by base-load power plants with low operation costs.

Peak load: Peak load occurs in the period with the highest load (e.g. midday). To cover this, expensive peak-load power plants have to be activated - generally for short periods only.

Network connection agreement: This agreement establishes legal relations between the regional authorized network operator and the consumer, registering the location (lot number and postal address) of the given network connection point, its basic technical parameters (voltage level), the available capacity - which represents asset value, and of course providing that the consumer has the power of decision concerning the connection point in question. The network connection agreement can include several connection points.

Network use agreement: This is the agreement on the basis of which the authorized network operator - in accordance with respective regulations - transmits electricity to the connection point of consumers (network users) with valid network connection and distribution agreements, and this agreement serves as the basis of billing grid access fees in return for using the service. The network use agreement concluded with the regional authorized network operator can apply to several connection points.

Legal successors: Stipulation by law in Chapter XXII, Section 176 (1) and (2). of the Electricity Act of 2007, regulating the legal relationship of authorized retailer, authorized network operator and user with regard to the termination of public utility supply on 31 December, 2007 and the user’s ensuing transformation into liberalized market user as of 1 January, 2008.

KÁT fee or Feed-in Tariff: The fee for the volume and control of electricity from renewable energy sources, waste as an energy source, and electricity produced in a cogeneration process, that is administered under a separate balance group and is to be purchased obligatorily by the supplier from the transmission system operator to promote the use of aforesaid so-called green energy, as set forth in the Electric Energy Act. This balance group is controlled and supervised by MAVIR Hungarian Transmission System Operator Zrt. This fee appears in the monthly settlement of accounts provided by the supplier, either as a separate item or included in the purchase price of electric energy, depending on the type of contract.

Compensatory (control) energy: Players of the electricity market (producers, suppliers and large consumers) need to be members of a balance group. The balance group responsible (the supplier) aggregates the estimated consumption of balance group members for the following day, and submits the schedule to the system operator (MAVIR Zrt.). If the difference of the submitted schedule and the actual metered data for this same period is negative, this balance group purchases compensatory energy from the system operator; if it is positive, it sells compensatory energy to the system operator. In case the consumer’s withdrawal exceeds the tolerance band fixed in their contract, the supplier adds the average monthly compensatory energy fee to the monthly settlement as specified for the supplier’s balance group by the system operator. This is thus the price of the volume of electricity required to offset the short-term differences between customer electricity withdrawals and intakes. This offsetting is realized by the appropriate performance control of power plants.

Exploitation rate: Exploitation rate indicates the evenness of energy consumption. It’s unit is hours (h), calculated as follows: annual metered consumption (kWh) / contracted capacity (kW). Since a higher exploitation rate means steadier stress for power plants and distribution networks, the increase of the exploitation rate usually leads to the reduction of the unit price.

Reactive power: Reactive power is generated when there is a phase difference between electricity and voltage. This cannot be exploited directly and causes a loss at delivery and transforming, therefore reducing the available transmission capacity for effective performance. Since it is a load on the electricity network without bringing profit, efforts should be made to compensate it. Reactive power charge is included in the regulated grid access fee.

Schedule: The schedule is a series of load data based on 15 minute intervals, estimated in advance, that is, an agreement between the client and the supplier on the evolution of capacity and energy purchase in time. A preliminary schedule has to be submitted in case of schedule and capacity tolerance band agreements.

Meter Point Administration Number: An international series of codes that serves to identify electricity supply points. Each and every electricity supply point in Hungary has to have this unique identification code.

The code is made up of 33 characters, for instance: HU000210F11-S00000000000005107744, where:

HU country code

Characters 3-8 denote authorized network operator:

000110 ÉDÁSZ
000120 DÉDÁSZ
000130 TITÁSZ
000210 ELMÜ
000220 ÉMÁSZ
000310 DÉMÁSZ
001000 MAVIR

Character 9 denotes the voltage level:

7 750 kV
4 400 kV
3 380 kV
2 220 kV
1 120 kV
A 30-35 kV
B 20 kV
C 10 kV
D 6 kV
E 3 kV
F 0.4 kV
- Summed-up value

Character 10:

1 main meter
2 control meter
3 total (local)
4 calculated value
5 summed-up value (centre)

Character 11:

1 reading by those responsible for providing data
2 secondary reading
3 tertiary reading

Character 12:

U ÜRIK type meter point - unique ID
E EOV type meter point - geographical ID
S serial number type meter point - serial number ID

Character 13:

- Hyphen
0 Reserve field used by MAVIR on this position
1 main grid connection
2 reserve grid connection
3 split grid connection
A main bus connection
B reserve bus connection
C split bus connection

Characters 14-33: unique series of characters


Balance group: According to the official definition of the Act on Electric Energy, balance group is a system of settlement comprised of one or more members designed to cover compensatory energy reimbursement/settlement, to carry out the related functions, and to govern the related liabilities. It is practically a virtual account consisting of an optional number of input and output points within a given regulation zone, to be named and thereby accurately defined by the responsible network operator. Purchase and output must be balanced within a balance group.

Contracted capacity: Electric capacity measured in kW or MW ordered by the buyer and provided for by the network operator in accordance with the contract. Its amount is stipulated in the contract between the customer and the network operator.

Full supply: Under full supply electricity is provided for the customer by one single supplier. In other words, the customer has no own electricity production unit and does not purchase electricity from any another supplier.

Tolerance band: A tolerance band for the digression of actual metered consumption values from the expected consumption given in advance (or from the 15-minute consumption values provided in the submitted schedule), which provides that the volume of consumed energy (kWh) is nevertheless accounted at the contracted energy price.

Expected consumption: Consumption estimated and submitted in advance for contracted and settlement periods (the latter is the billing period, usually identical to one calendar month), serving as the mean value of the tolerance band for consumption volume.