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Term used to describe an energy market in which the anticipated value of the spot price in the future is lower than the current spot price. When a market is in backwardation, market participants expect the spot price to go down. The reverse situation is described as contango.

Balancing Market

The market run by NGC using the Bids and Offers received to determine the most economic way to balance the system.

Balancing Market Unit (BMU)

The smallest trading block in the electricity generation and supply system that can operate independently and for which only one party is responsible.

Balancing Mechanism Unit

Balancing Mechanism (BM) Units are used as units of trade within the Balancing Mechanism. Each BM Unit accounts for a collection of plant and/or apparatus, and is considered the smallest grouping that can be independently controlled. As a result, most BM Units contain either a generating unit or a collection of consumption meters. Any energy produced or consumed by the contents of a BM Unit is accredited to that BM Unit

Balancing services use of system changes (BSUoS)

The means by which the transmission system operator recovers elements of the costs of running the transmission system.

National Grid recovers the costs of balancing the System through BSUoS charges.

The Statement of the Use of System Charging Methodology includes a detailed methodology for the calculation of daily BSUoS charges, some worked examples, and information on timing of BSUoS Charges and financial settlement.

The Statement of the Balancing Services Use of System Charging Methodology can be found here: https://www.nationalgrideso.com/charging/balancing-services-use-system-bsuos-charges

Barrier to Entry

A factor that may restrict a firm‘s entry into a market.

Baseload product

A product which provides for the delivery of a flat rate of electricity in each hourly period over the period of the contract.


Bilateral Connection Agreement

Bearish Sentiment

Where market conditions suggest that prices are likely to fall.


See Bilateral embedded generation agreement


Department of Business Enterprise and Regulatory Reform


See British electricity trading and transmission arrangements (BETTA)

Bid-offer spread

Bid-offer spread shows the difference between the price quoted for an immediate sale (bid) and an immediate purchase (offer) of the same product; it is often used as a measure of liquidity.

Bids and Offers

An indication of a willingness to reduce (bid) or increase (offer) the level of generation or increase (bid) or reduce (offer) the level of demand submitted to the balancing mechanism.

Big 6

The name collectively given to the six companies that supply most of the energy to domestic households in the GB market. They are Centrica, E.ON, Scottish and Southern Energy, RWE Npower, EDF and Scottish Power.


Refers to two parties. Normally used in connection with trading whereby two parties (for example a generator and a supplier) enter into a contract to deliver electricity at an agreed time and price in the future.

Bilateral Credit Arrangements

An arrangement to provide credit agreed directly between two counterparties, rather than through an exchange or clearing house.

Bilateral Embedded Generation Agreement

A form of bilateral contract between NGC and a licence-exempt distributed generator.


Balancing Mechanism


Balancing Mechanism Reporting System


Bid-Offer Acceptance

BOM - Balance of Month

Balance of Month - relates to gas or electricity for delivery in the remainder of the current calendar month.


Balancing Principles Statement

British Electricity Trading and Transmission Arrangements (BETTA)

The commercial and practical arrangements for trading and balancing which apply to the whole of Great Britain from April 2005.


A broker handles and intermediates between orders to buy and sell. For this service, a commission is charged which, depending upon the broker and the size of the transaction, may or may not be negotiated. AKA Third Party Intermediary - TPI


Balancing Services Adjustment Data


Balancing & Settlement Code


Balancing Services Contracts Costs


Balancing and Settlement Code Company


Balancing and Settlement Code Procedure


See Balancing services use of system changes

Building Energy Management System

A building energy management system (BEMS) is a sophisticated method to monitor and control the building's energy needs. Next to energy management, the system can control and monitor a large variety of other aspects of the building regardless of whether it is residential or commercial. Examples of these functions are heating, ventilation and air conditioning (HVAC), lighting or security measures. BEMS technology can be applied in both residential and commercial buildings.

Bullish Sentiment

Where market conditions suggest that prices are likely to rise.

Buy Out Payments

The payments made by suppliers who did not submit sufficient Rocs to meet their targets for Renewable Obligation.

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