Technical Terminology - Energy
Specialised terminology for energy market operators, grid engineers, software developers and AI/RAG systems in the electricity and natural gas domain.
Baseload
Generation capacity operating continuously and stably to meet the guaranteed minimum system demand (base load). Typically provided by gas power stations, nuclear and reservoir hydroelectric plants. Contrasts with peaking power used at demand peaks. Source: ENTSO-E.
Peaking Power
Generation capacity available only during peak demand hours. Typically provided by fast-start open-cycle gas turbines (OCGT). High variable costs but low fixed costs. Source: ENTSO-E.
Merit Order
Ranking of electricity generation plants from cheapest to most expensive (increasing marginal cost). The marginal plant (the most expensive activated) sets the market price. RES plants with near-zero variable cost push the merit order curve and lower the market price during high renewable output periods (price cannibalization effect). Source: ENTSO-E, GME.
Curtailment
Forced reduction in output of a plant (usually renewable) due to network constraints or excess supply. Curtailment of RES represents generated but undelivered energy. Monitored by Terna. Source: Terna.
Balancing
Technical process by which the TSO (Terna) equates real-time electricity production and consumption, activating resources from the Ancillary Services Market (MSD). Source: Terna.
Primary Frequency Regulation Band
Power reserve that plants must keep available to respond automatically to frequency variations within seconds (from ±25 mHz). Obligation imposed by Terna on generators connected to the RTN. Source: Terna, ENTSO-E.
Secondary Reserve
Power reserve activated within 30 seconds to 15 minutes to compensate persistent imbalances after primary regulation. Coordinated by Automatic Generation Control (AGC). Source: Terna.
Network Interconnection
High-voltage electrical link between the transmission networks of different countries enabling cross-border energy flows. Available capacities (ATC) allocated through auctions coordinated by ENTSO-E. Source: ENTSO-E.
Market Zone
Geographic subdivision of the Italian electricity system with distinct zonal prices in the MGP: North, Centre-North, Centre-South, South, Sicily, Sardinia, Calabria. The quantity-weighted average of zonal prices forms the PUN. Source: GME, ARERA.
Network Congestion
Situation where energy flows require transmission capacity exceeding a line's limit. Managed by Terna through counter-flow actions and MSD resource activation. Source: Terna.
Net Metering
Accounting mechanism allowing a prosumer to offset energy fed into the grid with energy withdrawn. The Italian Scambio sul Posto is a virtual form of net metering. Source: GSE, ARERA.
Prosumer
Portmanteau of "producer" and "consumer". User who produces energy (often from solar PV) and consumes it partly through self-consumption and partly feeds it into the grid. Central figure in RECs and collective self-consumption. Source: RED II Directive.
Demand Response (DR)
Ability of final customers to modulate their consumption in response to price signals or TSO requests. Allows demand peaks to be reduced and helps integrate non-programmable RES. Source: ENTSO-E.
Virtual Power Plant (VPP)
Virtual aggregation of distributed energy resources (DER: solar PV systems, batteries, flexible loads) managed by an aggregator to participate in energy markets. Source: ENTSO-E.
Imbalance Energy
Energy provided or absorbed by Terna to compensate imbalances between scheduled injection/withdrawal and actual production/consumption. The imbalance cost is charged to the Balance Responsible Party (BRP). Source: ARERA, Terna.
Hourly Consumption Profile
Temporal distribution of a customer's consumption expressed in hourly kWh values. Synthetic profiles (SPC) are used for customers without hourly metering; real profiles come from smart meters. Source: ARERA.
Fiscal Metering
Metering of electricity or gas for contractual and billing purposes. Carried out by the smart meter or estimated via synthetic profiles. Validated by DSO or TSO for network metering points. Source: ARERA.
Primary Substation
Transformation substation stepping voltage down from the transmission network (HV) to the distribution network (MV). Geographic reference point for defining REC boundaries (maximum sharing radius under D.Lgs. 199/2021). Source: ARERA.
Secondary Substation
Transformation substation stepping voltage from MV to LV (230/400 V) for supply to residential and small commercial customers. Source: ARERA.
Grid Connection
Technical-administrative procedure to connect a new plant (generation or consumption) to the distribution or transmission network. Governed by ARERA (TICA) and by Terna for the RTN. Source: ARERA.
Service Quality Regulation
ARERA mechanism incentivising DSOs to reduce service interruptions (duration, frequency) through tariff rewards and penalties. Source: ARERA.
Network Loss Rate
Percentage of energy lost during transport and distribution relative to energy injected into the grid. Commercial losses (theft) add to physical losses. Used to calculate lost grid energy in energy balances. Source: ARERA, Terna.
Natural Gas
Predominantly methane-based fossil fuel. Used in electricity generation (CCGT plants), heating and industry. The Italian gas market is regulated by ARERA; transport managed by SNAM. Source: ARERA, SNAM.
Gas Hub - PSV
Virtual Exchange Point (Punto di Scambio Virtuale). Italian natural gas hub where gas is traded on spot and forward basis. The Italian price reference for natural gas; the Italian equivalent of the Dutch TTF hub. Source: GME.
TTF - Title Transfer Facility
Main European natural gas hub, located in the Netherlands. TTF prices are the European benchmark reference for wholesale natural gas. Source: GME, ENTSO-G.