Glossary

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Allocation

The administrative determination of which portion of the supplied energy will be charged to which supplier. It is not possible to determine which supplier has supplied the energy by means of metering (in the network or of the customer’s meter). Allocation rules have been drawn up for the settlement of supply and transmission costs. The allocation method has been used since 1 January 2002.

Audit Committee

A committee comprising members of the Supervisory Board which supervises the Company’s important financial matters.

Biomass

Organic material originating from plants. The biomass used for energy purposes comprises cultivated vegetation and waste.

Business Review

The periodical reporting to the Board of Management.

CO2

Greenhouse gas which is regarded as one of the causes of climate change.

CO2 prices

Cost that industrial companies are required to pay for the emission of CO2. The price is charged per ton.

CO2 rights

Rights that are allocated to industrial companies in Europe. These rights correspond to the standard that has been set for the emission of CO2. This standard was determined by the European Committee. Companies which emit less CO2 by investing in cleaner processes, can trade the CO2 rights which they do not use on the CO2 market. Companies which have an above standard emission are required to purchase additional CO2 rights on the CO2 market.

COSO

A model for the establishment and maintenance of an internal control structure.

Capacity tariff

The tariff whereby the costs of transmitting gas and electricity charged by the grid administrator are not dependent on the actual consumption but on the type of connection

Compliance

Complying with the rules laid down by legislation or by the company and any supervisory bodies. Also used for departments of companies or commodity exchanges that ascertain whether trade is being conducted in accordance with the regulations.

Corporate Governance

Company management in the broadest sense. The system of responsibilities of all the parties (that can be) involved in the management of a company, such as the Board of Management, Supervisory Board, shareholders, banks and any other parties which have provided capital to the company.

Counterparty risk

The risk that a business with which an agreement has been made cannot fulfil its (financial) obligations.

Covenant

Agreement between different parties.

Credit rating

This rating represents an assessment of the credit risk of an organisation. The rating is determined by specialised agencies that award ratings such as AAA, AA, A, BBB, etc. depending on the creditworthiness of a company.  

Dark green

Dark green energy is energy that is generated from new sustainable resources which contributes to further enhancing the sustainability of the energy supply. Examples of sustainable resources include wind and solar energy and biomass. Hydropower is usually not dark green, because this form of energy generation already exists for quite some time and therefore does not contribute to further enhancing the sustainability of the energy supply. Dark green energy supplied by Eneco includes energy generated by its own energy production facilities and the sustainable production of partners with which it has long-term Power Purchase Agereements (PPAs).

Degree day

A degree day is a calculation unit that is applied to exclude the varying outdoor temperatuur from energy consumption calculations.

Disputes Commission

Virtually all consumers’/households’ complaints can be put before this Commission in The Hague. The decision of the Commission is binding.

EFET

European Federation of Energy Traders.

EFET or ISDA contracts

A (standard) framework contract under which trading partners can close deals. Reciprocal guarantees, rights and obligations as well as rules for calculation, or netting principles, are defined in these framework contracts.

Energie Nederland

The branch organisation for all the companies in the Netherlands active in the field of the generation, transmission and trade in or supply of gas, electricity and/or heat. The federation promotes the interests of the associated companies and is the contact point for the authorities, politicians and interest groups. EnergieNed carries out the dialogue with these parties at a national and international level on behalf of its members. www.energiened.nl.

Energy Service Company (ESCO)

A new form of contract with agreements relating to guaranteed energy saving measures. Through ESCO's, Eneco coordinates the entire chain of sales, advice, financing, production, operation, warranty management and monitoring.

Enterprise Risk Management (ERM)

The process of planning, organising, managing and controlling the activities of an organisation to minimise the chances of financial, strategic and operational risks.

Green gas

Gas that is generated from biomass and that is supplied at natural gas quality.

Hedging

The covering of a price or exchange rate risk of a particular investment position.

ISDA

International Swaps and Derivatives Association.

ISO

Non-governmental organization established in 1947 to promote international quality standards. ISO stands for International Organisation for Standardization.

Imbalance

Electricity imbalance occurs due to differences between programmes submitted in advance and the actual consumption or generation of electricity. TenneT corrects this and passes the imbalance costs on to the company that caused the imbalance.

In control statement

A declaration by the Board of Management stating that the achievement of targets is being monitored, that the reporting is reliable and that legislation and regulations are being complied with.

Independent Network Management Act (Wet Onafhankelijk Netbeheer, WON)

The Independent Network Management Act (Wet Onafhankelijk Netbeheer, WON) was passed in November 2006. This act stipulates that energy companies separate their networks and the management thereof from their commercial activities, and that the energy infrastructure remains in the hands of the government.

Interconnection

The connection of the Dutch gas and electricity networks to foreign networks for the importing and exporting of energy.

Internal Alignment Monitor

The Internal Alignment Monitor provides information about the degree to which employees actually support the group’s mission in their daily behaviour and about which management efforts do or do not contribute positively to stimulation of this behaviour. The minimum score is 0 and the maximum score is 100. The average score of about 10,000 respondents from more than 50 countries is around 55. Scores of 60 and up are considered to be strong and scores of 70 and up are considered to be excellent.  

Kyoto protocol

The Kyoto protocol, or Kyoto Accord, was established in the Japanese city of Kyoto in 1997 and regulates the reduction of greenhouse gas emissions.

LTIR

Lost Time Injury Rate. This is the unit of measurement of the safety performance of an organisation. It is calculated by comparing the number of accidents resulting in absence per one million hours with the actual number of productive hours.

Lease-and-leaseback

The leasing, for a fixed period of time, of property, plant and equipment to foreign parties that are then leassed back from the same parties for own use.

MWe

Unit for electric power.

MWp

Unit for electric power from solar energy.

MWt

Unit for thermal power.

Margining and clearing

Methods to neutralize reciprocal counter-party risks. In margining the change in value of the underlying contracts is revised and calculated financially against bank accounts intended for this purpose on a regular basis (generally daily). Clearing involves a similar process but then via a third party appointed for this purpose – the so-called clearing member.

Marked-to-market value

Indicates the net present value of a contract or collection of contracts.

MiFID

MiFID stands for Markets in Financial Instruments Directive. The aim of this European guideline is to stimulate competition on the European market and to offer private investor throughout Europe the same level of protection.

Net Promotor Score (NPS)

The degree to which customers recommend a supplier to friends and acquaintances. The number is calculated by subtracting the percentage of detractors from the percentage of promoters.

Netbeheer Nederland

Dutch association that looks after the interests of national and regional electricity and gas grid administrators.

One Planet Thinking

One Planet Thinking (OPT) is a joint development project of Eneco, WWF and Ecofys. The aim is to gain insight into what companies can do to enhance the sustainability of their value chains in such a way that, in the long term, their activities will have a less detrimental effect on human health, the quality of ecosystems and the availability of resources.

Operational Excellence

The strategy of optimising processes at the lowest costs.

Power Purchase Agreement (PPA)

A long-term contract with a producer for the purchase of electricity.

Programme responsible parties

Parties with programme responsibility match the demand for electricity to the supply for the following day so as to prevent underutilization/overloading of the transmission network and contribute to the balance of the supply system. This is a consequence of the statutory obligation of programme responsibility applicable to everybody connected to the electricity network.

ROACE

Return on Average Capital Employed. An important indicator of the profitability of a company. Is calculated by subtracting a 25% tax ratio from the EBIT and dividing this number by the average capital invested.  

Reconciliation

A system for calculating the planned and used quantities of energy between the parties with programme responsibility. Energy companies with programme responsibility must plan the consumption of their customers for the following day and submit this plan to the network manager. The companies base their estimates on consumption profiles. Deviations from the pattern cause imbalance and that incurs costs. Reconciliation is the settlement of the difference between the expected and actual consumption.

Remuneration Committee

Committee comprising members of the Supervisory Board that is responsible for developing and monitoring the remuneration policy for Board of Management members within the company.

Rotterdam Climate Initiative (RCI)

The Rotterdam Climate Initiative is a platform for government, institutions, companies and citizens to cooperate in reducing the CO2 emission by 50% and strengthening the economy in the Rotterdam area.

Shipping

The responsibility of everyone connected to the Dutch gas network to plan the daily production, distribution and consumption of gas. This planning must be submitted to the national grid administrator in the form of programmes. The supplier performs the shipping responsibility task on behalf of the customer.

Sparkspread

The difference in development between the electricity prices and the gas price, which determines the profitability of an electricity plant. 

Stimulation scheme sustainable energy generation (SDE)

Subsidy scheme effective since 2008 for producers of sustainable energy.

Suppliers model

In the suppliers model the supplier is the only contact point for the retail energy customer. In this model the supplier’s bill also includes the costs of energy transmission.

Swap constructions

Constructions whereby two parties take over each others obligations/liabilities. Used in foreign currency trading to indicate that it involves the discounted purchase or sale of foreign currencies while, at the same time, a similar amount is bought or sold via a foreign exchange forward contract.

TTF

The TTF (Title Transfer Facility) is a virtual trading point for gas.

Unbundling

The separation of the network company from the generating, trading and supply activities of an energy concern.

x-factor

The Office of Energy Regulation, which is part of the Dutch Competition Authority Nma, determines the so-called x-factor. With this effectiveness stimulus the regulator aims to improve the efficiency of the transmission companies, which are by nature monopolists in their areas, by adjusting tariffs each year. The x-factors indicate the percentage by which the transmission tariffs will be reduced or may be increased.