Accident frequency rate (AFR)
The number of lost time accidents (LTAs) divided by the number of hours worked, multiplied by 100,000 (for 2010).
Annual General Meeting (AGM)
Annual General Meeting of shareholders of the Company.
Asset-backed trading
The buying and selling of the electricity generated and fuel used by our power stations.
Biomass
Non-fossil organic matter used as a renewable energy source in commercial electricity generation or heat production.
Bond
Financial instrument that obligates the issuing company (the borrower) to make specified payments to the holder (the lender).
Call option
An option to buy a security at a pre-determined price.
Capacity (installed)
Generator capacity (measured in megawatts (MW)), measured at the power station boundary after the deduction of works power. Net capacity is simply the installed capacity in MW multiplied by International Power’s ownership percentage.
CEO
Chief Executive Officer.
CFO
Chief Financial Officer.
COO
Chief Operating Officer.
CO2
Carbon dioxide.
Cogeneration
The simultaneous generation of electricity and heat in the form of steam, typically where the need for both arises for industrial or commercial purposes and where the steam is generated by utilising the waste heat from electricity generation.
the Combination
On 3 February 2011 the Combination of International Power and GDF SUEZ Energy International was completed. GDF SUEZ Energy International was transferred to International Power in exchange for shares in the enlarged International Power. As a result GDF SUEZ now holds approximately 70% of the share capital of International Power.
Combined Code
The Code which sets out the expected corporate governance standards for companies listed on the London Stock Exchange, as amended or supplemented from time to time.
Combined cycle plant
Combined cycle gas turbine (CCGT) – the combination of a gas turbine (GT) and steam turbine (ST) in a configuration that enables electricity to be generated directly from a generator driven by the GT and, by using exhaust gases from the GT to produce steam, a ST coupled to the same generator or another generator.
the Company
International Power plc.
CR
Corporate responsibility.
Dark spread
The difference between the cost of coal to generate electricity and the price at which electricity is sold.
Debt capitalisation
Net debt divided by the sum of the net debt and total equity (book value).
Demerger
The process whereby National Power split its UK and international operations (International Power) into separate businesses.
Desalination plant
Plant which produces drinking water from sea water.
Due diligence
A process undertaken before the acquisition of a business to ensure all significant risks, rewards and issues are identified and considered before any offer is made to the vendor or an acquisition takes place.
Emission certificates
Under various environmental schemes, emission certificates are required to cover the amount of relevant emissions made by a power station. Cap and trade schemes are a common type of scheme. Under a cap and trade scheme, operators are required to purchase sufficient emission certificates to cover their actual emissions, and the operator may or may not be granted an initial volume of certificates. Examples of such schemes include the European Union Emissions Trading Scheme (EUETS) which covers emissions of CO2, based on a cap and trade system. Other examples include the Clean Air Act in the US which covers emissions of oxides of nitrogen (NOx) and oxides of sulphur (SOx).
EPC contract
Engineering, procurement and construction contract, used principally for the building of power stations by a turnkey contractor.
Earnings per share (EPS)
Calculated by dividing the profit after interest, tax and non-controlling interests by the weighted average number of Ordinary Shares in issue.
Equator Principles
A benchmark for lenders regarding the management of social and environmental issues in project financing.
ERCOT
Electric Reliability Council of Texas – responsible for managing the Texas generating and transmission systems.
ETS
Emissions trading scheme – programme for the trading of emissions permits mainly relating to CO2 output.
EUETS
European Union Emissions Trading Scheme.
Feed-in-tariff
Guaranteed tariff for energy produced, often provided by governments to support renewable generation.
FGD
Flue gas desulphurisation – a process which removes SOx from the flue gas emissions of a coal plant.
Forced outage rate
A measure giving the proportion of electrical energy that was actually unavailable for generation during the period due to unplanned outages, expressed as a percentage of the maximum potential electrical energy generation, after taking account of planned outages.
Fossil fuel
Fossil fuels are formed from the fossilised remains of dead plants and animals by exposure to heat and pressure in the Earth’s crust over hundreds of millions of years. They are found within the top layer of the earth’s crust and range from very volatile materials with low carbon-to-hydrogen ratios like methane, to those with high carbon-to-hydrogen ratios like liquid petroleum. They also include non-volatile materials composed of almost pure carbon, like anthracite coal. Fossil fuels are non-renewable resources because they take millions of years to form.
Functional currency
The currency of the primary economic environment in which the entity operates.
Gearing
Net debt as a percentage of total equity.
GDF SUEZ Energy International
GDF SUEZ’s Energy International Business Areas (outside Europe) and certain assets in the UK and Turkey.
Greenfield land
A piece of undeveloped land, either currently used for agriculture or just left to nature.
the Group
International Power and its subsidiary undertakings, and (except where used in the Directors’ report) its joint ventures and associates depending on the context.
GSA
Gas supply agreement.
GT
Gas turbine.
GW
Gigawatt, one thousand million watts.
Gigawatt-hour (GWh)
A watt hour is the amount of energy used by a one-watt load drawing power for one hour. A gigawatt-hour (GWh) is 1,000,000 times larger than the kilowatt-hour and is used for measuring the energy output of large power plants.
Hedge contracts
A contract that gives protection against risks of future price movements.
HS&E
Health, safety and environment.
HUBCO
Hub Power Company.
IASB
International Accounting Standards Board.
ICOM
Investment Committee.
IFRS
International Financial Reporting Standard.
IPA Central
Four modern peaking generation facilities located in PJM and MISO, wholly owned by International Power.
IPP
Independent power producer.
ISO 14001
The international standard of environment management systems.
ISO:NE
New England power pool.
KAPCO
Kot Addu Power Company.
KPI
Key performance indicator.
kW
Kilowatt – 1,000 watts.
Kilowatt-hour (kWh)
A watt hour is the amount of energy used by a one-watt load drawing power for one hour. A kilowatt-hour (kWh) is 1,000 times larger than a watt-hour and is a useful size for measuring the energy use of households and small businesses and also for the production of energy by small power plants. A typical household uses several hundred kilowatt-hours per month.
Kyoto Protocol
A protocol to the International Framework Convention on Climate Change with the objective of reducing greenhouse gases in an effort to prevent climate change.
LCPD
Large Combustion Plant Directive.
Liquidated damages (LDs)
Being a reasonable pre-estimate of loss specified in a contract, payable if one party breaches one part of a contract.
LNG
Liquefied natural gas. Natural gas which is condensed into liquid by cooling it to approximately minus 162 degrees Celsius, mainly to facilitate its storage or transportation.
LNG terminal
Purpose-built port facilities that are used to receive, unload, store, transport, gasify, liquefy or process natural gas.
Load factor
The proportion of electricity actually generated, compared with the maximum possible generation at maximum net capacity.
Lost time accident (LTA)
A person being absent from work for one or more working days or shifts (excluding the day or shift when the accident occurred) due to injury or ill health sustained at work.
Letter of Credit (LoC)
A credit facility provided by a bank.
Mark to market
The act of attributing a fair or market value to a financial instrument rather than its historical cost. Marking to market is required under accounting rules for certain derivatives and financial instruments.
Merchant market
A merchant market is a deregulated market. It is a market in which electricity is bought and sold competitively by multiple market participants.
Merchant plant
Our merchant plants operate in deregulated markets selling power into the traded market without long-term power purchase agreements (PPAs).
MIGD
Millions of imperial gallons per day.
MISO
Midwest Independent System Operator.
Mitsui
Mitsui & Co. of Japan.
MW
Megawatt; one MW equals 1,000 kilowatts or one million watts.
Megawatt-hour (MWh)
A watt hour is the amount of energy used by a one-watt load drawing power for one hour. A megawatt-hour (MWh) is 1,000 times larger than the kilowatt-hour and is used for measuring the energy output of large power plants.
MWth
One megawatt of thermal power, which is a measurement of heat.
Non-recourse debt
Debt secured on an asset, and where the lender has no recourse to the shareholder.
NOx
Oxides of nitrogen.
O&E
Operations and engineering.
O&M
Operations and maintenance, usually used in the context of operating and maintaining a power station.
OCGT
Open cycle gas turbine – turbines, typically fuelled by gas or diesel oil, are used to drive the generators to produce electricity, with no use of the waste heat for subsequent power generation.
Offtake agreement
Power purchase agreement between a company owning a power station and its customer (the offtaker) whereby the customer takes the electricity generated by a power station.
OHSAS 18001
Occupational Health and Safety Assessment Series 18001. A management system specification, developed by British Standards Institute which is now an accepted international standard, for health and safety which is compatible with ISO 9001:1994 (Quality) and ISO 14001:1996 (Environmental) management.
Operational control
Operational control includes all subsidiaries, joint ventures and associates with over 50% shareholding, and those assets where International Power always appoints the Station Manager, or Executive Managing Director, and therefore can exert significant influence over operations at the entity.
OSA
Oil supply agreement.
Outage
When a generating unit is removed from service to perform maintenance work. This can either be planned or unplanned.
Peak load
The maximum demand for electricity during a specified high demand period. This may require use of plant (for example pumped storage) that is kept in reserve for peak periods.
Peaking plant
Plant that runs only in times of short supply (normally during peak demand), when prices are high.
PJM
Pennsylvania, New Jersey and Maryland power pool.
Power purchase agreement (PPA)
See also ‘Offtake agreement’. A PPA is generally a long-term contract between an electricity generator and a purchaser of energy or capacity (power or ancillary services).
Proprietary trading
The trading of commodities for the purposes of making a profit, when the commodity, is not generated by our own power stations or purchased for use by our own power stations, also known as non-asset backed trading.
Pumped storage
A method of energy generation that involves moving water between reservoirs at different elevations. When electricity prices are low, typically overnight, electricity from the grid system is used to pump water into a raised reservoir and then at times of peak demand, when electricity prices are higher, the water is released back into the lower reservoir through a turbine.
Put option
An option to sell a security back to the issuer at a pre-determined price.
PWPA
Power and water purchase agreement.
Recourse debt
Debt where the lender has recourse to parties other than the borrower, usually a parent company or shareholder.
Retail
The sale of power and/or gas to end users.
Reserve margin
The amount of available plant reserve capacity above the system’s peak electricity requirements.
RGGI
Regional Greenhouse Gas Initiative, a US regulation towards carbon emission reduction in ten north eastern states.
RPI
Retail Price Index.
SCR
Selective catalytic reduction – equipment to reduce the content of oxides of nitrogen in flue gases.
SO2
Sulphur dioxide.
SOx
Oxides of sulphur.
Spark spread
The difference between the cost of gas to generate electricity and the price at which electricity is sold.
Spot price
Market price at a particular point in time.
Spread
The difference between the fuel costs to generate electricity and the price at which electricity is sold.
Technical availability
A measure giving the proportion of electrical energy that was actually available to be generated during the period, after taking account of both planned and unplanned outages, expressed as a percentage of the maximum potential electrical energy generation.
Tolling agreement
A form of long-term electricity contract where the buyer of electricity also supplies the fuel.
t/h
Tonnes per hour.
TSR
Total shareholder return.
Turnkey contract
A contract where one party takes full responsibility for the construction and commissioning of a plant, delivering the plant in full working order to the owner.
Turnbull Guidance
The Turnbull Guidance expands upon the Combined Code requirements for the Directors’ review of the effectiveness of the Group’s system of internal controls.
UAE
United Arab Emirates.
US Sarbanes-Oxley Act
The Sarbanes-Oxley Act of 2002 was enacted in reaction to the highly publicised bankruptcies of Enron and WorldCom and is concerned with strictly enforcing corporate governance and financial disclosure.
Watt
Unit of power, which is the rate at which energy is delivered (i.e. work is done at a rate of one watt when one ampere flows through a potential difference of one volt).