an option bought or sold without an offsetting position in the underlying. see also covered option
a swap position without a corresponding asset or liability.
a refined product, between jet and gasoline in specific gravity, which is used as a feedstock for the petrochemicals industry – such as for ethylene manufacture or aromatics production – and as a refinery feedstock for reforming. Comprises material in the 30°–210° Celsius distillation range or part of this range.
a plan to establish the emissions target for the covered sectors, as well as deciding how this target is divided among the various installations covered by the system. Article 9 of the Emissions Trading Directive established that each member state periodically has to develop such a national allocation plan.
The national balancing point, commonly referred to as the NBP, is a virtual trading location for the sale and purchase of UK natural gas. It is the most liquid gas trading point in Europe. Gas at the NBP trades in pence per therm.
the National Electricity Code contains the rules for the running of the Australian wholesale national electricity market. It sets out the objectives of the market and the rights and responsibilities of market participants.
made up of the five participating jurisdictions of the Australian national electricity market (NEM). The aim of the organisation is to promote the effectiveness, efficiency and equity of the NEM to push the market towards more competition and market-orientated outcomes in order to deliver a viable market that benefits customers.
the market for the wholesale supply and purchase of electricity in the Australian states and territories of Australian Capital Territory, New South Wales, Queensland, South Australia and Victoria, together with the transmission and distribution networks in those states and territories.
in Australia, the organisation responsible for the administration and operation of the wholesale national electricity market in accordance with the National Electricity Code. Nemmco’s aim is to provide an effective infrastructure for the efficient operation of the Australian wholesale national electricity market.
an international energy delivery business, whose principal activities are in the regulated electricity and gas industries. It owns and operates the high-voltage electricity transmission network in England and Wales and the UK’s natural gas transportation system. In July 2005 its shareholders agreed to change its name to National Grid plc.
the UK high-pressure pipeline system, owned by National Grid Transco, used to transport gas between terminals, storage facilities, large consumers and regional sites. When the gas leaves the NTS at an offtake, it goes through a series of pressure-reducing tiers before it reaches the consumer.
gas consisting mainly of methane and ethane that occurs naturally in the earth’s crust. It is often found in association with crude oil, when it is called associated gas. Futures and options contracts are traded on Nymex, International Petroleum Exchange and Kansas City Board of Trade.
liquids produced along with natural gas. They consist mainly of propane, butane, natural gasoline and condensate.
a natural hedge is the reduction in risk that can arise from an institution’s normal operating procedures. A company with significant sales in one country holds a natural hedge on its currency risk if it also generates expenses in that currency. For example, an oil producer with refining operations in the US is (partially) naturally hedged against the cost of dollar-denominated crude oil. While a company can alter its operational behaviour to take advantage of a natural hedge, such hedges are less flexible than financial hedges.
see national balancing point
see National Electricity Market Management Company
see North American Electric Reliability Corporation
the difference between the entity’s open long contracts and open short positions in any one commodity.
a technique for assessing the worth of future payments by looking at the present value of those future cash flows discounted at today’s cost of capital.
see new electricity trading arrangements
a provision in a physical power contract that allows the bearer to net a debt position with one counterparty by offsetting it with a credit position with another counterparty.
a pricing assessment or pricing formula based on the effective price to the producer or seller at a specific location or defined point. For example, liquefied natural gas netback prices may be determined by the market natural gas price at market destinations less the cost of pipeline transportation, regasification, waterborne shipping and liquefaction. Crude oil may be priced on the market value of its refined products, or natural gas priced based on the natural gas market price less the cost for delivering from the defined point to the market location.
NetConnect Germany is a joint company established 2008 by bayernets GmbH and E.ON Gastransport for the merged H-gas market area in Germany. The company’s business activities, which include balancing group management, operation of the virtual trading point and the online provision of information including billing and control energy data, are geared towards serving network operators and shippers alike. www.net-connect-germany.de
an agreement that offsets the value of contracts by creating a single net exposure between counterparties. see also bilateral netting, multilateral netting
(UK) the rules governing relations between National Grid Transco, as operator of the national transmission system, and shippers who use the system.
Neta is a system of bilateral trading between generators, suppliers and consumers on the UK market, the aim of which is to reduce wholesale electricity prices. see also Betta
the new gas trading arrangements were introduced in the UK in October 1999 in an attempt to improve the efficiency of the balancing system. The arrangements consist of the on-the-day commodity market, auctions of entry capacity and improved incentives for shippers to balance their own positions.
US futures exchange, consisting of two divisions: the Nymex division and the Comex division. Along with metals futures and options, the exchange offers trading for energy futures and options in crude oil, heating oil, gasoline, natural gas and electricity, as well as propane futures and options on the crude oil/gasoline and crude oil/heating oil crack spreads. In August 2008, Nymex Holdings, the parent company of Nymex was acquired by CME Group. The exchange also operates the Nymex ClearPort® Services for clearing trades, as well as the Nymex ACCESS® system for after-hours trading when the open-outcry trading floor is not open. www.nymex.com
typically, Newcastle thermal coal prices as traded for Australia’s Newcastle port in New South Wales, which is the world’s largest coal export harbour.
see new gas trading arrangements
a gas produced by burning fossil fuels in power plants or automobile engines. Nitrogen oxides are pollutants that contribute to the formation of smog. A nitrogen oxide allowance trading market exists across 11 US states under the US Clean Air Act. see also sulphur oxides
the notification to put into effect a contract or part of a contract. For example, a gas flow nomination from a shipper to advise the pipeline owner of the amount of gas it wishes to transport or hold in storage on a given day.
(US) the deadline for nominations for gas supply, transportation and storage volumes given to the pipeline owner for a full month in the last week of the previous month. This happens around the time of the expiry of the futures contract on Nymex; the actual day varies between pipelines.
a US geographic area in which air quality is worse than that allowed by the US federal air pollution standards.
electricity transmission service offered to customers that anticipates possible interruption of deliveries. see firm service, interruptible service
(US) gas sales and transportation outside Federal Energy Regulatory Commission regulations.
see notice of proposed rulemaking
Nordic electric power exchange that provides market places for trading in physical and financial contracts in the Nordic countries (Finland, Sweden, Denmark, Iceland and Norway), which listed the world’s first exchange-traded electricity futures contract in October 1995. It now operates the world’s largest power derivatives exchange and also provides a carbon market for trading contracts on emission allowances and carbon credits. In 2002, Nord Pool’s physical market was organised into a separate company, Nord Pool Spot AS.
a continuous probability distribution whose probability density function has a ‘bell’ shape. A normal distribution is symmetric, and has zero skewness. A normal distribution is fully described with two parameters: its mean and standard deviation.
a group formed in 1968 by US utilities, after blackouts struck the east coast, to promote the reliability and adequacy of bulk power supply in the electricity utility systems of North America.
a North American Electric Reliability Council within the Eastern Interconnection.
a Federal Energy Regulatory Commission document outlining proposed rules and soliciting comments from affected parties.
the underlying principal value of either an exchange-traded or over-the-counter transaction, referred to as the notional value.
(Gas) usually the shortest route along which gas would travel from entry point to exit point.
the substitution of a new contract for an old one or the substitution of one party in a contract with another party.
see nitrogen oxide
see national transmission system
Hsee New York Mercantile Exchange