Glossary

Agency for the Cooperation of Energy Regulators.

Participants trading on organised markets must report such transactions to ACER (the national regulatory authority of the Member State) in accordance with Article 9 of REMIT (Regulation (EU) No 1227/2011 of the European Parliament and of the Council on wholesale energy market integrity and transparency). The Spanish register of market participants was established for this purpose.

It is the reading shown by the meter on the date indicated on the invoice.

These are the markets for system adjustment services, intended to balance generation and demand, understood as the markets related to deviation management services, tertiary regulation, and secondary regulation.

A group of materials of biological origin that can be used to generate electricity, to be converted into fuels, or directly to produce heat. They are primarily derived from industrial and urban waste, energy crops, and biological products, waste and residues from agriculture, forestry or related industries. They are generally considered renewable sources because, unlike fossil fuels, the sources from which they are obtained are continuously replenished.

Regulated payment to finance the medium and long-term power capacity service offered by generation facilities to the electricity system.

Capacity reservations. The regulation provides for two types of capacity auctions: main auctions, annual, associated with a capacity service provision period of five years; and adjustment auctions, also annual, associated with a service provision period of 12 months.

It is an agreement for the purchase and sale of electricity between two Market Participants, such as a Direct Consumer and a Producer, in which a quantity of electricity is agreed upon at a price and for a period of time agreed between the two parties. It is carried out via the participants’ scheduling units.

Unlike PPAs, CBFs can be arranged at short notice.
The committed energy does not enter the daily market clearing system.

The agreements and conditions vary and are agreed solely between the parties; they are not subject to market rules. The exchange of energy will take place on an hourly basis between the Direct Consumer and the Producer.

a centre that monitors and manages the output of renewable energy producers, primarily wind farms. It enables the integration of as much renewable energy as possible into the electricity grid whilst maintaining quality standards and ensuring security of supply.

It is the centre responsible for coordinating, operating and supervising the security of the entire Spanish electricity system; its functions include planning electricity demand coverage and international exchanges, as well as zonal operation and remote control; it also acts as the master regulator for the Peninsular Shared Regulation system.

The CIL code refers to the production facility code for billing purposes. It is generated by the distribution companies once the connection point has been approved (when the access and connection file is closed).

The National Commission for Markets and Competition promotes and safeguards the proper functioning of all markets in the interests of consumers and businesses.

It must verify the information provided both during user registration and when participants register.

A combined-cycle power station is one in which electricity is generated through the combined use of two turbines: a gas turbine and a steam turbine. Electric generators are connected to both the gas and steam turbines.

A process by which electrical energy and useful thermal and/or mechanical energy are produced simultaneously.

The Universal Supply Point Code (CUPS) is a 22-character code (numbers or letters) starting with ES. This code allows the supplying company to identify an energy supply point (electricity or gas).

When the transmission network is unable to support the renewable energy production of generators, curtailment occurs, reducing production below its potential. This results in energy loss and affects Power Purchase Agreements (PPAs), which are minimized with physical Power Purchase Agreements (CPAs), as detailed in Procedimiento de Operación de REE 3.2.  Technical constraints are minimized.

The role of the demand aggregator is to manage electricity demand in a flexible manner. To this end, they act as traders of flexible short-term consumption loads, making offers to increase or decrease electricity consumption, thereby guaranteeing energy savings for businesses and consumers.

A demand aggregator, or active demand management, is an entity that can bring together different players within an energy system—such as consumers, self-consumers, small-scale producers, prosumers, batteries, electric vehicle charging points, or any combination of these—to act as a single entity and participate in the electricity market (both wholesale and retail) or sell services to the system operator.

This is someone who acquires energy directly from the Production Markets for their own consumption. As a market participant, they can plan their purchasing strategy, reducing the cost of acquiring their energy, access the daily and intraday markets, the futures market, manage bilateral contracts with physical energy delivery (CBF), request a Certificate of Guarantee of Origin for renewable energy, and participate in demand management by providing Balancing services to the System, achieving savings compared to the traditional way of purchasing through energy retailers.

Decentralized energy resources (DERs) generally include controllable loads, distributed generation, and energy storage. Therefore, DER stands for the technical unit that can provide flexibility of any kind as a decentralized source.

They are responsible for the operation, maintenance and development of the distribution network in a given area, as well as its interconnections with other networks, and for ensuring that the network has the capacity to assume, in the long term, a reasonable demand for electricity distribution.

A DSO is defined as the legal entity responsible for operating, maintaining, and, where applicable, developing the distribution system in a given area and, where applicable, its interconnections with other systems, and for ensuring the long-term capacity of the system to meet reasonable electricity distribution demands.

Commercial entities or consumer cooperatives that, by accessing transmission and/or distribution networks, purchase energy for resale to end consumers and other system participants

The EIC code allows for unique identification at both national and international levels in energy markets. Red Eléctrica de España is the Local Issuing Office for EIC codes in Spain.

A market participant is defined as any natural or legal person involved in economic transactions taking place in the electricity generation market, buying or selling electricity:

• Electricity generators.
• Suppliers.
• Direct consumers in the market.
• Agents.

In order to exercise the right to buy and sell energy on the market, market participants must adhere to the Operating Rules of the Electricity Generation Market.

This is an estimated reading. The calculation is based on historical consumption data from the same period of the previous year.

It is the sum of actions taken by consumers, producers, and storage facilities within the electrical grid over different timeframes, serving to maintain the balance between generation and demand and guaranteeing the stability and security of supply.

Participants obtain economic benefits by modulating their consumption, making their flexibility profitable, while the system operator gains new tools to manage peak demand and optimize grid planning.

It promotes the integration of renewable energy sources and improves the participation of consumers and producers in the energy market by aggregating bids and developing flexible markets.

Process that applicants for the balancing service must follow to enable the facilities that will participate in it.

Flexibility is defined as the ability to adjust generation and consumption patterns in reaction to a signal (price or activation signal) to contribute to different services.

One of the main traditional processes capable of producing hydrogen is through the transformation of a solid or liquid fuel into a gas. This transformation occurs at high temperatures (over 1,000°C) and creates a synthesis gas mixture called syngas, composed primarily of carbon monoxide and hydrogen.

A power station that transports steam from underground to special turbines capable of converting the thermal energy produced by the Earth’s heat into electricity.

Gases that cause a greenhouse effect in the Earth’s atmosphere and are therefore responsible for the ongoing global warming and its resulting climate changes. The most harmful are carbon dioxide (CO2), methane (CH4), nitrous oxide (N2O), sulfur hexafluoride (SF6), hydrofluorocarbons (HFCs), and perfluorocarbons (PFCs).

It is hydrogen obtained from water through an electrolysis process powered by electricity produced from clean energy sources.

It is an electronic certificate that verifies that the energy purchased has been generated from renewable energy sources and high-efficiency cogeneration.

The CNMC is the body responsible for issuing and managing it.

An indexed contract is one in which the energy consumed is billed based on the hourly clearing price of the energy pool plus coverage, plus a commercial margin allocated to the marketing company for its management.

It comprises the electrical systems of the Balearic Islands, the Canary Islands, and the autonomous cities of Ceuta and Melilla.

Balearic Electrical System: The Balearic Islands are interconnected, allowing the Balearic electrical system to operate as a single system, which is, in turn, connected to the Iberian Peninsula via a submarine cable from Mallorca. These connections significantly increase the security and quality of the electricity supply throughout the archipelago.

Canary Islands Electrical System: The Canary Islands electrical system consists of six small, electrically isolated systems with a weakly meshed electrical infrastructure network. To reduce its vulnerability, it is evolving towards a new, more efficient and sustainable energy model based on renewable energy sources.

It is the graphical representation of the load (either in kW or MW) over the appropriate time sequence, in this case expressed in hours.

When the load curve is plotted over 24 hours of the day, it is called a daily load curve. If it is considered over a year, it is called an annual load curve.

An entity that can participate in the Spanish electricity market, both for buying and selling energy. Market participants include electricity producers, distributors, retailers, and direct consumers, as well as companies or consumers residing in other countries who are authorized as external agents. They must comply with market regulations.

A representative of a consumer, generator, or marketer is someone who acts on behalf of any entity for the purposes of their participation in the production market and the collection and payment of regulated tolls, charges, prices, and fees.

There are two types of representation: indirect (representation in one’s own name but on behalf of another) and direct (representation in one’s own name but on behalf of another).

The price of the final sale offer that had to be allocated to meet demand in a market call. This is the price that all producers receive and all consumers participating in that call pay.

It is the entity responsible for managing guarantees, billing, and collecting and paying the system operator’s settlement.

A third party authorized by REE for managing energy collections and payments.

The Official Financial Options and Futures Market in Spain is an organized market regulated, controlled and supervised by the CNMV and the Ministry of Economy of Spain.

It is the main electricity market in the Iberian Peninsula. Daily energy prices are set here, and it is managed by the independent operator OMIE.

This market allows the buying and selling of electricity between participating agents every day of the year.

Market participants set the energy price for each hour of the day, based on supply and demand. OMIE receives all buy and sell offers by noon of the current day, corresponding to each of the 24 hours of the following day. The price and volume of energy committed for a given hour are established by matching supply and demand, following the marginalist model adopted throughout the European Union, and using an algorithm called Euphemia.

Once OMIE receives and ranks all production offers and demand (from highest to lowest return), the supply and demand curves are adjusted, resulting in what is known as the clearing price.

After the day-ahead market, where most energy is traded, market participants can buy and sell electricity again in the intraday market. They can do this continuously or in separate trading sessions.

There are six trading sessions based on auctions like the one described above. These auctions typically produce prices similar to those in the day-ahead market and allow buyers and sellers to adjust their commitments.

It comprises all commercial transactions involving the purchase and sale of energy and other services related to the supply of electricity. It is structured into forward markets, day-ahead markets, intraday markets, continuous intraday markets, over-the-counter markets, and system adjustment services, which include resolving technical constraints in the system and balancing services.

The Iberian Electricity Market (OMIE) is a joint initiative of the Portuguese and Spanish governments, aimed at building a regional electricity market. Through this entity, any individual or legal entity can purchase energy daily or on futures contracts in a free and competitive market. Both OMIE and OMIP are part of MIBEL.

It is the designated electricity market operator for the management of the daily, intraday and continuous intraday markets in the Iberian Peninsula (Spain and Portugal).

It is responsible for managing the futures or forward energy market in the Iberian Peninsula (Spain and Portugal).

A plant that converts the kinetic energy of the wind into electrical energy. The term ‘onshore’ refers to land-based power stations, whilst the term ‘offshore’ refers to wind farms built on bodies of water, usually seas or oceans.

This is a mandatory, non-compensated supplementary service provided by connected generators to automatically correct instantaneous imbalances between production and consumption. It is delivered by the immediate and autonomous adjustment of generator power output through turbine speed governors in response to frequency variations. It is equivalent to the European product known as Frequency Containment Reserves (FCR).

A Programming Unit is an operational entity defined by the System Operator (REE) that groups one or more generation or consumption points to manage, schedule and settle its participation in the electricity market.

The primary objective of producers is to feed all the energy generated by their facilities into the grid. They are compensated for this and thus carry out an economic activity.

Special Regime Producer

This refers to all energy generation carried out in facilities with a capacity of no more than 50 MW, based on renewable energy sources and those using cogeneration.

A prosumer is considered an end user who not only consumes energy, but also produces it.

Red Eléctrica de España is the operator of the Spanish electricity system, both on the Iberian Peninsula and in the non-peninsular systems of the Canary Islands, the Balearic Islands, Ceuta, and Melilla. It manages the high- and medium-voltage electricity transmission network, guaranteeing the security and continuity of electricity supply at all times.

As the system operator, Red Eléctrica establishes electricity demand forecasts and operates the electricity generation and transmission facilities in real time, ensuring that the scheduled production at power plants coincides with consumer demand at every moment.

They replace the Last Resort Retailers (CUR) and are the companies designated to offer the Voluntary Price to the Small Consumer (PVPC).

European regulatory framework on the integrity and transparency of the wholesale energy market.

The CNMC oversees the integrity and transparency of the wholesale electricity and gas markets, encompassing both the spot and forward markets. It monitors transactions executed by participants and ensures they are carried out without abusive practices, market manipulation, or insider trading.

These are energy sources obtained from renewable natural resources and waste. They include hydropower, hydro-wind, wind, photovoltaic solar, solar thermal, biogas, biomass, geothermal, tidal, and renewable waste.

Replacement reserve balance energy. Activation of active power reserves intended to resolve deviations between generation and consumption that may be identified after the close of the intraday market and to restore or maintain the frequency recovery energy level with manual and automatic activation. This service, which can be activated manually in 30 minutes or less, is managed through the European platform LIBRA.

Mechanism that allows the transfer and resale, by a subject, of the capacity acquired in explicit auctions or through transfers.

This optional supplementary service aims to maintain the balance between generation and demand by correcting deviations from the planned exchange schedule of the Spanish Control Block and frequency deviations. Its operating time ranges from 20 seconds to 15 minutes. This service is remunerated through market mechanisms based on two components: availability (regulation band) and utilization (energy). It is equivalent to the European product known as Automatic Frequency Restoration Reserves (aFRR).

System that performs the processes related to production markets and international interconnections, as well as data management, archiving and publication of the results of the above processes.

A smart grid is one that can efficiently integrate the behavior and actions of all connected users, ensuring a sustainable and efficient energy system with low losses and high levels of quality and security of supply.

Smart grids are based on combining information and communication technologies (ICT) with automation and control, and even the application of artificial intelligence, in electrical networks. A smart grid encompasses all the necessary technological infrastructure, from energy generation, transmission and distribution, and electrical storage, to energy consumption.

This is an optional, but mandatory, supplementary service for authorized units, managed and remunerated through market mechanisms. Its purpose is to resolve imbalances between generation and consumption and to restore the secondary regulation reserve used, by adapting the operating programs of the scheduling units corresponding to generation facilities and pumped storage facilities. The tertiary regulation reserve is defined as the maximum power variation that a generation unit can make in a maximum of 15 minutes, and which can be maintained for at least 2 hours. It is equivalent to the European product known as Manual Frequency Restoration Reserves (mFRR).

It is a system for setting the price of electricity implemented by the government, which is applied to the bills of consumers with a contracted power of no more than 10 kW. The PVPC replaces the previous Last Resort Tariff (TUR).