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.



System Buy Price.


All commodity futures markets are affected to some extent by an annual seasonal cycle or ‘seasonality’. This cycle of pattern refers to the tendency of market prices to move in a given direction at certain times of the year.

Settlement Risk:

The risk that arises when payments are not exchanged simultaneously. The simplest case is when a bank makes a payment to a counterparty but will not be recompensed until some time later; the risk is that the counterparty may default before making the counter payment.  Settlement risk is most pronounced in the foreign exchange markets, where payments in different currencies take place during normal business hours in their respective countries and can therefore be made up to 18 hours apart, and where the volume of payments makes it impossible to monitor receipts except on a delayed basis.  This type of risk is afflicted counterparties of Germany’s Bank Herstatt in 1974, which closed its door between receipt and payment on foreign exchange contracts. As a result, settlement risk is sometimes called Herstatt risk.


A company that transports gas along a pipeline system. Shippers need to be registered with the local regulatory body. In the UK gas market terms, a shipper is a company that buys gas ‘at the beach’ and pays Transco to transport the gas along the pipeline system.


The seller of a financial contract.

Short position:

A position that increases in values if the value of the underlying instrument or market price decreases in value.


  1. Gas losses in the transportation and distribution systems.
  2. Gas volume lost through the extractions of liquid gases and the removal of water and other impurities.


Secondary government legislation known as a Statutory Instrument.


System Operator, responsible for matching supply and demand. This is one of the roles of NGET in England, Wales and Scotland.


Sulphur dioxide.

Sour crude:

Crude oil containing a relatively high percentage of sulphur by weight, typically more than 0.5%.

Sour gas:

Natural gas with a high sulphur content, which requires treatment before use.


Sulphur dioxide and other oxides of sulphur.

Spark Spread:

The difference between the price of electricity sold by a generator and the price of the fuel used to generate it, adjusted for equivalent units. The spark spread can be expressed in dollars per megawatt hour (MWh) or $ per million British thermal units (mmBtu) or other applicable units. To express it in $/MWh, the spread is calculated by multiplying the price of gas, for example (in $/mmBtu), by the heat rate (in Btu/kilowatt hour), dividing by 1,000 and then subtracting the electricity price (in $/MWh). Also called a spark arbitrage.

Specific Risk:

Specific risk is the portion of a security’s market risk that is unique to that security. For example, the risk that an individual stock’s price may vary because of its industrial sector rather than the broader equity market.


The opposite of hedging. The speculator holds no offsetting cash market position and deliberately assumes price risk in order to reap potential rewards.

Spot Market:

In the energy sector, the spot market is the physical/cash crude, refined product, gas or electricity market. The market for immediate delivery rather than futures delivery.

Spot Price:

The price of a security or commodity in the cash market.


The difference between the bid and ask price. Liquid markets are characterised by narrow bid/ask spreads.


Short rotation coppice.


Scottish Renewables Obligation.


Scottish ROCs.


System Sell Price.

Strike Price:

The price at which the underlying futures contract is bought or an option is exercised.  Also called an exercise price.


An agreement whereby a floating price is exchanged for a fixed price over a specified period. It is an off-balance-sheet financial arrangement involving no transfer of physical energy – both parties settle their contractual obligations by means of a transfer of cash.  The agreement defines the volume, duration and fixed reference price.  Differences are settled in cash for specific periods – monthly, quarterly or six-monthly.  Swaps are also known as contracts for differences and fixed-for-floating contracts.


An option to buy (call option) or sell (put option) a swap at some future date.


Variations in gas demand.

Swing Producer:

A company or country that changes its crude oil output to meet fluctuations in market demand. Saudi Arabia is seen as the world’s major swing producer, as it deliberately limits its crude oil production in an attempt to keep supply and demand roughly in balance.

System Price:

The benchmark price for all electricity sold within an integrated grid system, calculated on the basis of all transactions within the area disregarding price fluctuations caused by bottlenecks. The system price is used as a reference for financial settlements.