Like many industries, the energy industry has developed an language all of it's own. Brokers and suppliers talk about Duos Charges and Triads and avialabiity, but what to they actually mean?

We've put together what we think is the most complete glossary of energy terms on the net, if you can't find what you're looking for here give us a call and we'll see if we can help you.

L

LEC (Levy Exemption Certificate)

Climate Change Levy Exemption Certificate. Generators can apply to Ofgem to have their output exempt from the Climate Change Levy (CCL). If accredited under the scheme Ofgem issues generating stations with Levy Exemption Certificates (LECs) . When electricity is supplied accompanied by a LEC, the consumer of the electricity does not have to pay the Climate Change Levy on it.  Some LECs are generated from renewable sources; and sometimes is marketed as “green” though a LEC is not evidence of renewable generation.

Letter of Credit:

Instrument or document issued by a bank guaranteeing the payment of a customer’s drafts up to a stated amount for a specified period. It substitutes the bank’s credit for the buyer’s and eliminates the seller’s risk.

Line Losses:

The difference between the quantity of electricity generated and the quantity delivered at same point in the electricity system. Losses vary depending on temperature, voltage level and load levels.

Liquidity:

A market is liquid when it has a high level of trading activity.

Liquidity Risk:

The risk that a firm unwinding a portfolio of illiquid instruments may have to sell them at less than their fair value because there are few buyers. An illiquid market may be defined as one characterised by side bid/ask spreads, lack of transparency and large movements in price after any sizeable deal.

LNG:

Liquefied Natural Gas. Natural gas (mainly methane) that has been liquefied for ease of storage and transportation. The gas is liquefied either by reducing temperature or increasing pressure.

LPG:

Liquefied Petroleum Gas. A light hydrocarbon composed mainly of propane and butane, occurring naturally in crude or from refining processes such as crude distillation, catalytic reforming or hydrocracking. Gaseous at atmospheric pressure and temperature, LPG’s are liquefied by reducing temperature or increasing pressure for ease of transportation and storage.

Load:

The amount of power carried by a utility system or sub-system, or the amount of power consumed by an electrical device, at a specified time. Load is also referred to as demand.

Load Factor:

The ratio between average and peak usage for electricity or gas customers. The higher the load factor, the smaller the difference between average and peak demand.

Load Shape:

A combination of electricity contracts covering a period of weeks or months, which reflects the profile of the daily power requirements of a customer.

London Clearing House:

A member-owned clearing house. LCH has signed agreements with online trading platform Intercontinental Exchange to provide clearing services for a number of European energy contracts.

Long:

The buyer of a financial contract.

Long Position:

A position that appreciates in values if the values of the underlying instrument or market prices increases.