Common Energy Acronyms
AC—Alternating current
Description: A type of electrical current in which the direction of the flow of electrons switches back and forth at regular intervals. Most current flowing in power lines and household electricity coming from wall outlets is alternating current. Easier to increase or decrease the voltage of AC with transformers.
BESS—Battery energy storage system
Description: Rechargeable batteries that can store energy from different sources and discharge it when needed, most commonly paired with solar. Battery energy storage systems vary in size (residential, commercial, utility-scale), chemistry, and storage duration. Key for addressing renewable intermittency.
CAPEX—Capital expenditures
Description: Funds used by a company to acquire, upgrade, and maintain long-term physical assets. In energy terms, this most often refers to the upfront cost of building a new power plant.
CCUS—Carbon capture utilization and storage
Description: Process that captures carbon dioxide emissions from large point sources (such as fossil power plants or industrial facilities) and either reuses or stores it so it will not enter the atmosphere. Currently an expensive process but will be crucial for difficult to decarbonize sectors and may become more prevalent in light of recent EPA rules.
CF—Capacity factor
Description: Ratio of the actual electrical energy produced by a generating unit over a period of time compared to its theoretical maximum power production during the same period. For example, nuclear has a high capacity factor while solar has a relatively low capacity factor (given its lack of production at night).
COD—Commercial operations date
Description: The date large-scale energy projects come online and begin generating power to earn revenue.
DAC—Direct Air Capture
Description: Process that extracts CO2 directly from the atmosphere at any location (not just large point source emitters) for permanent storage. Considered a carbon removal technique rather than carbon capture. Energy-intensive and currently very expensive.
DC—Direct current
Description: An electric current following one direction only. Direct current is used for recharging batteries and transmitting electricity over long distances to minimize loss. Solar panels also produce direct current.
DER—Distributed energy resource
Description: Small-scale energy resources usually situated near sites of electricity use, such as rooftop solar panels and battery storage.
EPC—Engineering, procurement, and construction
Description: Firms in charge of getting a large-scale energy infrastructure project built. They create engineering blueprints, purchase raw materials, and physically construct the project. The EPC may or may not be owned by the independent power producer (see below) that “developed” (planned/financed) the project.
IOU—Investor-owned utility
Description: Private (for-profit), monopoly utilities that generate and distribute power to electric customers over their defined service territory. Regulated by PUCs (see below). Examples include Duke Energy, Southern Company, First Energy, Dominion Energy, etc.
IPP—Independent power producer
Description: Also known as a non-utility generator (NUG), an IPP is an entity that is not a public utility but owns facilities to generate electricity for sale to utilities or end users. Most energy developers are considered IPPs (i.e. Pattern Energy, Cypress Creek Renewables, etc.). It is important to note that some utilities have IPP branches that operate in complete isolation from the utility (i.e NextEra Energy, Duke Energy, etc.).
IRP—Integrated resource plan
Description: An assessment of future electricity needs and a plan to meet those future needs carried out by public utilities. Essentially a planning tool to help utilities forecast their future energy mix.
ISO—Independent system operator
Description: Independent organizations that handle electric grid operations, electricity market facilitation, and bulk electric system planning. Similar to RTOs but generally have a smaller service territory.
ITC—Investment tax credit
Description: Most often utilized for solar plant construction, ITCs reduce the federal income tax liability for a developer by a certain percent of the total system cost (CAPEX). Currently, the federal ITC for renewables is 30%, but there are additional 10% bonuses for meeting domestic content requirements and being located in “energy communities.” Often developers don’t use the tax credits themselves, but sell them to banks through tax equity deals. s
kW—Kilowatt
Description: 1,000 watts, a measure of power. 1 watt = 1 joule per second. For example, power tools and air fryers typically require about 1 kW of power.
kWh—Kilowatt hour
Description: 1,000 Watt hours, a measure of energy. It is the unit of measure for using 1 kW of power for one hour. For example, if a power tool was rated at 1 kW and you used it for 1 hour, you would have consumed 1 kWh of electricity. The average U.S. household consumes 29 kWh/day.
LCOE—Levelized cost of energy/electricity
Description: Measures lifetime costs of a power plant divided by total energy production. Inputs include CAPEX, fuel costs (if applicable), operations & maintenance expenses, etc. Used to compare the relative prices of different types of energy generation.
LNG—Liquified Natural Gas
Description: Natural gas that has been cooled to liquid form (~260° Fahrenheit) to allow for long-distance shipping and extended storage. LNG is generally more expensive than pipeline natural gas, but it has created a global gas market and is the only feasible source of gas for some countries without reserves. The U.S. is currently building out its LNG export capacity.
MW—Megawatt
Description: 1,000,000 watts, a measure of power. 1 watt = 1 joule per second. 1 MW is roughly enough electricity for the instantaneous demand of 750 homes at once.
MWh—Megawatt hour
Description: 1,000,000 Watt hours, a measure of energy. It is the unit of measure for using 1 MW of power for one hour. The average U.S. household uses a little over 1MWh/month.
NGCC—Natural Gas Combined Cycle
Description: The dominant type of natural gas power plant in operation, a combined cycle plant captures excess heat from the gas turbine in order to run an additional steam turbine. This in turn is much more efficient than a traditional single turbine gas plant.
O&M—Operations & Maintenance
Description: Activities associated with running and maintaining the power plant once it is in operation. Includes replacing broken parts, cleaning solar panels, landscaping, etc.
PPA—Power purchase agreement
Description: Long-term contract between an electricity generator and a customer (most often utilities and large companies). Most large-scale renewables projects have a PPA, as having a guaranteed buyer of the generated electricity at a set rate derisks the project and justifies the upfront capital spend.
PTC—Production tax credit
Description: Tax credits that are generated per kilowatt-hour of electricity produced by qualifying renewables facilities during the first 10 years of operation (up to 2.75 cents/kWh). Generally developers can either claim a production tax credit or investment tax credit, not both. Wind farms are the most likely to claim the production tax credits.
PUC—Public utility commission
Description: Quasi-governmental body that provides oversight and/or regulation of public utilities in a certain area (usually a state). Approve electric rates and capital expenditures of IOUs. Their goal is generally to ensure that utilities provide reasonable, adequate and efficient service to customers at just and reasonable prices.
PV—Photovoltaic
Description: Essentially “solar.” Usually appears as PV (solar) plant or PV (solar) cell, which is a nonmechanical device that converts sunlight directly into electricity.
RTO—Regional transmission operator
Description: Organization that coordinates, controls, and monitors the operation of the electric power system across a large geographic area. Serves the same functions as an ISO, but RTOs are generally larger, often spanning across many states.