Glossary

Absolute Volatility Index (IVA)

index of absolute volatility of Prices. It measures the variability of the phenomenon in a period of time in absolute terms, i.e. in €/MWh. With reference to one month, the IVA is calculated as the weighted average of the standard deviations of Prices in each minimum market time interval of a working day and of a holiday. For longer periods of time (quarter, half-year, year), the index is calculated as the weighted average of the volatility indexes in the months of the period.

Access Profile (GOs)

i. if the Participant is present in the GO Registry with a single access profile, it is the access profile - among those identified in the Technical Rules - that GSE has assigned to the Participant upon entry into the GO Registry, through which the Participant takes part in the M-GO and/or the PB-GO ; ii. if the Participant is present in the GO Registry with multiple access profiles, each of the access profiles - among those identified in the Technical Rules - that GSE has assigned to the Participant upon entry into the GO Registry, through which the Participant takes part in the M-GO and/or the PB-GO.

Acquirente Unico (AU - Single Buyer)

company (“società per azioni”) created by Gestore della Rete di Trasmissione Nazionale (now Gestore dei Servizi Energetici - GSE) with the task of guaranteeing the availability of electricity to cover the demand of all Captive Customers. AU operates by purchasing the required electrical capacity, reselling it to distributors on non-discriminatory terms and making it possible the application of a single national tariff to customers. To do so, AU may purchase electricity in the Power Exchange or through Bilateral Contracts. The legislation on emergency oil stocks assigned additional responsibilities to AU.

Adjustment Market (MA) - This market has been no longer active since 1 November 2009. (MA)

trading venue where producers, wholesalers, and final customers modified the injection/withdrawal schedules that they had defined in the Day-Ahead Market (MGP). On 1 Nov. 2009, the MA was replaced by the Intra-Day Market (MI).

Adriatic LNG Segment

Segment of the PAR dedicated to the trading of regasification capacity slots at the regasification terminal managed by Terminale GNL Adriatico Srl, also in compliance with the provisions of the regasification code.

Allocation Request

function that can be activated, at the request of each regasification company in each segment of the PAR, dedicated to the allocation of capacity no longer available in auction.

Annual and Multi-Annual Capacity

the primary and issued regasification capacity, available for allocation, at each regasification terminal, at the beginning of each thermal year for the thermal year and/or the thermal year/s after the one in which the allocation for the continuous capacity service is made.

Applicable Period (ISP)

Imbalance Settlement Period/s (ISP/s), i.e. the minimum time interval/s in respect of which nominations may be registered and imbalances are settled.

ARERA

– see Autorità di Regolazione per Energia Reti e Ambiente

Ascending Open Auction

the method for trading products for the allocation of annual and multi-annual regasification capacity on the PAR referred to in Article 17 of EU Regulation no. 459/2017, which provides for the submission, modification and cancellation of purchase offers associated with a scale of rising Prices compared to the Reserve price in the context of consecutive allocation procedures included in a single Session, in order to conclude transactions at a single price.

AU

– see Acquirente Unico.

Auction Trading

mechanism of trading which involves the submission, change and cancellation of trading orders within a given time interval, with a view to concluding contracts at a single future time and at a single price.

Auctioning Procedures

procedures organised and managed by GSE in accordance with article 4 of AEEG’s Decision ARG/elt 104/11.

Autorità di Regolazione per Energia Reti e Ambiente (ARERA - Regulatory Authority for Energy, Networks and Environment)

independent regulatory authority established by Law no. 481 of 14 November 1995 with the task of guaranteeing the promotion of competitiveness and efficiency in the electricity & gas sectors. With regard to GME’s activity, ARERA is responsible, among others, for defining rules for Merit-Order Dispatch and market power control mechanisms.

Balance of PCE Schedules

in each market time interval, difference between the sum of CET offers for injection and the sum of CET bids for withdrawal coming from the Forward Account Registration Platform (PCE) and registered in the Day-Ahead Market (MGP).

Balancing and Redispatching Market (MSD)

Balancing and Redispatching Market (MSD) means the Integrated Scheduling Process, i.e. the venue where Terna procures resources for the balancing and redispatching service and which consists of the sessions specified in the Dispatching Rules.

Balancing Charges (also “Unbalancing charges”)

charges owed by parties injecting or withdrawing electricity or natural gas into/from the grid or network (Dispatching Users or Balancing Users, respectively) when they deviate from Injection or Withdrawal Schedules.

Balancing of the Electricity Market

service that Terna S.p.A. provides as part of its dispatching service. The balancing service consists in giving dispatching commands in order to maintain in real time: i) the equilibrium between injections and withdrawals into/from the national power system; and ii) adequate Margins of secondary Reserve Capacity, taking into account the physical limits of the system. To this end, Terna S.p.A. purchases the related services in the Balancing and Redispatching Market (MSD).

Balancing of the Gas Market

service that Snam Rete Gas provides as part of its dispatching service. The balancing service consists in monitoring and controlling flow parameters (flow rates and pressures) in real time, so as to guarantee secure and efficient gas transport and handling from injection points to withdrawal points.

Balancing User

Balancing User is the person referred to in Article 1, paragraph 1.2 h) of Annex A to Resolution 312/2016/R/GAS.

Basic Injection Schedule

injection schedule of units (to be nominated under the Dispatching Rules) that is determined as a result of activities of registration on the PN.

Basic Withdrawal Schedule

withdrawal schedule of units (to be nominated under the Dispatching Rules) that is determined as a result of activities of registration on the PN.

Bids/Offers

– see Offers/Bids.

Bilateral

– see Bilateral Contract.

Bilateral Contract (Bilateral or Over-The-Counter Contract or OTC Contract)

contract of supply of electricity or natural gas concluded off the markets managed by GME.

Bilateral Contract Registered on the PCE

contract of supply of electricity made off the Power Exchange between a producer/wholesaler and an Eligible Customer. The price for the supply and the injection and withdrawal profiles are freely agreed by the parties. However, under AEEG’s Decision 111/06 (as subsequently amended and supplemented), transactions and related CET offers/bids for injection or withdrawal are to be registered on the Forward Account Registration Platform (PCE), where they will be checked for consistency with the Transmission constraints on the National Transmission Grid.

BIOCAR Portal

electronic certificate archive, organized and managed by GSE, consisting of the set of ownership accounts on which the CICs issued by GSE are deposited in favour of the account holders, as well as the movements of the CICs deposited following the trading on the MCIC or through Bilateral trading, or as a result of blocking, withdrawal or cancellation.

BRP

Balance Responsible Party: a party that has signed a contract with Terna for the dispatching service, as defined in the Dispatching Rules.

BSP

Balance Service Provider: a party that has signed a contract with Terna for the provision of global national ancillary services, as defined in the Dispatching Rules, or a party responsible for providing local ancillary services to the DSO.

Capacity during the Thermal Year

the primary and issued regasification capacity, made available for allocation, for periods of time shorter than the thermal year, at each regasification terminal for the continuous and spot capacity service.

Capacity No Longer Available in auction

the Capacity during the Thermal Year, remaining after the last auction, which is allocated by each regasification company under the first come first served principle.

Capacity Reserve

– see Reserve Capacity.

Captive Customers

until 30 June 2007, final customers allowed or opting to contract for energy only with their local distributor.

Cascading

procedure under which quarterly and yearly Forward Contracts (futures, forwards and Contracts for Difference) are replaced upon maturity with an equivalent number of contracts of shorter maturity. The new positions are opened at a price equal to the final Settlement price of the original contracts.

CCC

- see Contract Covering the Risk of Volatility of the Fee for Assignment of Rights of Use of Transmission Capacity.

CCT

- see Fee for Assignment of Rights of Use of Transmission Capacity.

CDM

- see Clean Development Mechanism.

CHP Generation

- see Co-generation.

CIC

(Certificates of Release to Consumption): certificates referred to in article 6, para. 1, of the Ministerial Decree of 16 March 2023, certifying that a sustainable renewable energy carrier for transport was released to consumption in a given year; they are distinguished into the types specified in the Technical Rules.

CIP-6

resolution no. 6 adopted in 1992 by Comitato Interministeriale Prezzi (CIP - Interministerial Committee on Prices). The resolution promotes the construction of plants for generation of electricity from renewable and/or other eligible sources as per Law 9/91. GSE purchases the electricity generated by such plants under art. 3.12 of Legislative Decree 79/99, and sells it on the Power Exchange under art. 3.13 thereof. CIP-6 electricity has Dispatching Priority, in accordance with art. 3.12 of Legislative Decree 79/99. In the years elapsing from the approval of Legislative Decree 79/99 to the start of the Power Exchange, GSE sold such electricity to final customers by selling yearly and monthly electricity bands (similar to Bilateral Contracts). Since 1 January 2005, GSE has been offering CIP-6 electricity directly on the Power Exchange: Market Participants with CIP-6 allocations are required to enter into a Contract for Differences with GSE, under which they undertake to procure the Volumes of electricity corresponding to their allocations in the Electricity Market.

Co-generation (or Combined Heat & Power Generation - CHP)

combined generation of electricity and heat. Electricity generated by co-generating plants benefits from Dispatching Priority under art. 3.3 of Legislative Decree 79/99.

Combined Heat & Power Generation

– see Co-generation.

Congestion Rent

overall value of Fees for Assignment of Rights of Use of Transmission Capacity (CCT).

Constrained Zone (“Point of Limited Production” or “Pole of Limited Production”)

set of generating units connected to one portion of the National Transmission Grid without Withdrawal Points and whose maximum generation exportable to the rest of the grid is lower than the maximum possible generation owing to insufficient Transmission capacity.

Continuous Trading

mechanism of trading based on automatic matching of demand bids with supply offers, with continuous entry of new Bids/Offers during the trading sessions.

Contract Covering the Fee for Assignment of Rights of Use of Transmission Capacity on Foreign Interconnections (DCT)

financial contract signed between Terna and a BRP covering the risk of volatility of the Fee for Assignment of Rights of Use of Transmission Capacity (CCT) pertaining to cross-border transits. The matter is covered by AEEG's Decision 288/06.

Contract Covering the Risk of Volatility of the Fee for Assignment of Rights of Use of Transmission Capacity (CCC)

financial contract signed between Terna and a BRP and covering the risk of volatility of the Fee for Assignment of Rights of Use of Transmission Capacity (CCT) pertaining to national transits. Terna awards this contract through yearly and monthly auctions. Under the contract, the BRP pays to Terna a fixed price in exchange for the return of the value of the CCT. The matter is covered by AEEG’s Decision 224/04, as subsequently amended.

Contract for the Purchase and Sale of Electricity from Renewable Sources

- see PPA Contract.

Contract Registration Section

The on-line report of the PPA BULLETIN BOARD within which the selling participant fulfils the obligation to register PPA contracts.

Contract Types in the MTE

The types of contracts tradable in the Forward Electricity Market (MTE) are: - Base-Load, whose underlying is electricity to be delivered in all the hours of the days belonging to the delivery period; - Peak-Load, whose underlying is electricity to be delivered in the hours from the ninth to the twentieth of the days belonging to the Delivery Period, excluding Saturdays and Sundays.

Cumulative Average Price of Green Certificates (the platform for trading GCs was disabled on 30 June 2016)

average price of Green Certificates having the same reference year; this price is weighted for the Volumes traded in GME’s regulated market, considering all the sessions in which such Green Certificates have been traded. This price is monthly updated.

Customer Profile

The profile, corresponding to the Priority end customer or all priority end customers, for which the user, authorised to participate the energy release sections, is entitled to submit offers in that section of the PPA Bulletin Board.

Daily Products

The types of products listed in the MPEG relating to the trading of electricity whose delivery is made at each of the applicable periods, belonging to the trading day, included in the traded daily product Delivery Profile.

Daily Products Market (MPEG)

The trading venue where the Daily Products are traded.

Day-Ahead Flexibility Market (MGP-Flex)

trading venue for the selection of market participants’ offers/bids that are consistent with the request for Local Ancillary Services relating to the calendar day immediately following the trading day.

Day-Ahead Gas Market (MGP-GAS)

trading venue of gas demand bids and supply offers for the three gas-days following the one in which the trading Session opens. All Participants authorised to carry out transactions at the Virtual Trading Point ( PSV ) can trade in the MGP-GAS. The MGP-GAS takes place under Continuous Trading.

Day-Ahead Market (MGP)

venue for the trading of electricity supply offers and demand bids for each market time interval of the next day. All electricity operators may participate in the MGP. In this market, supply offers may only refer to injection and/or storage portfolios, and demand bids may only refer to withdrawal portfolios. GME accepts Offers/Bids by Merit Order, taking into account the Transmission Limits notified by Terna S.p.A.. Accepted supply offers are remunerated at the Zonal Clearing Price. Accepted demand bids are remunerated at the zonal clearing price and increased by the compensatory component equal to the difference between the zonal clearing price and the PUN Index GME. Accepted Offers/Bids determine the commercial positions of injection and withdrawal of each portfolio for the next day. Participation in this market is optional.

DCT

- see Contract Covering the Fee for Assignment of Rights of Use of Transmission Capacity on Foreign Interconnections.

Delivery Period

Period during which: - The electricity subject to Daily Products or the Forward Contracts is injected/withdrawn. - The natural gas subject of the Forward Contracts is injected/withdrawn.

Delivery Profile

The baseload or peakload profile that characterizes the daily product listed in the MPEG.

Demand Curve

segment of line on the volume-unit price plane, which refers to a minimum market time interval and which is obtained by cumulating Demand Bids verified to be technically adequate and ranked by non-increasing unit price order, starting from those without a specified price.

Deviations/Imbalances (also “Unbalancing”)

deviations/differences between actual Injections/Withdrawals and final Injection/Withdrawal Schedules of a generating/consuming unit. Balancing Charges are applied to such quantities.

Dispatching Contract

contract entered with a view to assigning the right to inject and withdraw electricity into and from the power system between holders of resources connected with such system and TERNA.

Dispatching Priority

offered price remaining equal, priority in the economic Merit Order by which Offers/Bids are ranked for Market Resolution. As specified in the Dispatching Rules, this priority is sequentially applied to: Offers/Bids in respect of must-run units; Offers/Bids in respect of non-schedulable RES-E units; Offers/Bids in respect of schedulable RES-E units; Offers/Bids in respect of co-generating units; Offers/Bids in respect of CIP-6 units; supply offers in respect of generating units which are only fed by national primary fuel sources, for a maximum yearly amount not exceeding fifteen per cent of all the primary energy required to generate the electricity to be consumed; and Offers/Bids related to Bilateral Contracts. Priority of dispatching does not mean guaranteed dispatching.

Distributed resource

an energy resource (generation or consumption) connected to the DSO distribution grid.

DSO

Distribution System Operator as mentioned in Article 2 (29) of Directive 2019/944.

Economic Dispatch

– see Merit-Order Dispatch.

Electricity Allocation Procedure

The procedure by which GSE sells, within the Energy release section, electricity Volumes at its disposal in order to implement the provisions of Decree N. 341 of 16.09.2022 by the Minister for the Ecological Transition, implementing for the first time the provisions of Article 16-bis of Decree-Law N. 17 of 2022, converted with amendments into Law n. 34 of 27 April 2022.

Electricity Market (ME)

the set of the Day-Ahead Market (MGP), the Intra-Day Market (MI), the Daily products market (MPEG), and the Forward Electricity Market (MTE).

Electricity Market Participant

Individual or organisation that is admitted to trading in the Electricity Market or in the Green Certificates Market.

Eligible Customer

• Electricity: natural or legal person entitled to choose his/her/its own supplier of electricity (producer, distributor, Wholesaler). Since 1 July 2004, under AEEG’s Decision 107/04, all natural or legal persons not buying electricity for their own household use, including producers and wholesale customers, have been eligible customers. On 1 July 2007, all customers became eligible. Since 1 January 2005, eligible customers have been entitled to purchase electricity directly on the Power Exchange. • Natural gas: natural or legal person entitled to choose his/her/its own supplier of gas (producer, importer, distributor, Wholesaler) both in Italy and abroad. On 1 January 2003, all final customers became eligible.

Energy Efficiency Certificates (or White Certificates; TEE)

White Certificates established by the Decrees issued by the Ministry of Productive Activities, jointly with the Ministry of Environment and Land Protection, on 20 July 2004 (Ministerial Decrees of 20 Jul. 2004), as subsequently amended and supplemented by the Ministerial Decrees of 21 Dec. 2007, of 28 Dec. 2012 and of 11 Jan. 2017. They give evidence of energy savings that electricity and gas distributors with over 50,000 customers are required to achieve. Energy Efficiency Certificates, which are issued by GME under an authorisation granted by GSE, may be sold or bought in the Energy Efficiency Certificates Market (MTEE) or bilaterally. Bilateral transactions should then be registered on the Platform for Registration of Energy Efficiency Bilaterals ( TEE Register ).

Energy Markets

the set of the Day-Ahead Market (MGP), the Intra-Day Market (MI), the Daily Products Market (MPEG) and the Forward Electricity Market (MTE).

Energy release section

The section of PPA Bulletin Board under which the power allocation procedures are carried out.

Fee for Assignment of Rights of Use of Transmission Capacity (CCT)

fee defined in art. 23.4 of ARERA Resolution 304/2024/R/eel (TIDE), as subsequently amended and supplemented. With regard to CET offers/bids for injection/withdrawal pertaining to zonal injection portfolios associated with a forward withdrawal account for the step-down margin only, registered under the PCE Rules, this fee is equal, for each minimum market interval, to the product between: 1) the difference between the PUN Index GME and the Zonal Price of the Zone where the units associated with the portfolios are located; 2) the post-MGP CET offers/bids. In each minimum market time interval, both in the MGP and in the MI, this fee for GME is equal to the difference between the purchasing value and the selling value of Power Exchange Volumes.

Final Schedule

schedule determined by Terna for each unit and made available to the related BRPs and BSPs at the same time as the publication of the results of the MSD, in accordance with the Dispatching Rules. It corresponds to the sum of the basic schedule and of the movement schedule.

Forward Account Registration Platform (PCE)

venue for registering transactions and CET bids/offers that is organised and managed by GME under Annex A to AEEG Resolution 111/06, updated under Annex A to ARERA Resolution 345/2023/R/EEL. Five types of contracts may be registered on the PCE: four contracts of standard type (base-load, peak-load, off-peak, week-end) and one contract of non-standard type. Market Participants may register data concerning the Volumes and delivery duration of their Forward Contracts up to two months ahead of the date of physical delivery. In general, each Market Participant owns one or more sale accounts, one or more purchase accounts, one or more storage accounts, and one blank account. The Market Participant may register purchases and sales on each of such accounts, provided that the net balance resulting from the new registration is a net sale (in the first case), a net purchase (in the second and fourth case), and a net sale or purchase (in the third case). The registration of purchases and sales, which modify the net position of each Market Participant on each account, are allowed up to two days before the start of the corresponding physical delivery. Therefore, each contract may be registered 60 to 2 days ahead of delivery. The balance of the account defines the volume of electricity that may be delivered/withdrawn or sold/purchased in the MGP or combinations thereof. By definition, CET bids/offers for injection/withdrawal must be equal to or at the most lower than the net position; a CET bid/offer lower than the net position represents a repurchase at the PUN Index GME in the MGP, in the case of a sale account or a storage account, and a sale at the PUN Index GME in the MGP, in the case of a purchase, storage, or blank account. This means that, in each Imbalance Settlement Period (ISP), there may be imbalances with respect to injection and withdrawal schedules and that, at the end of the month, the aggregated imbalance with respect to the schedules may be positive (the forward market is long and resells the surplus on the Power Exchange) and negative (the forward market is short and purchases the deficit on the Power Exchange). It is worth pointing out that, for each CET bid/offer, Participants may specify a positive price; in the case of a sale, such price represents the minimum price (with respect to the market price) below which the Participant prefers purchasing electricity on the Power Exchange, rather than delivering the specified volume (likewise, in the case of a purchase, the Participant may specify a maximum price above which such Participant prefers reselling electricity on the Power Exchange rather than withdrawing it).

Forward Contract

contract admitted to trading in forward markets of electricity and natural gas and concerning future supplies of electricity and natural gas, respectively.

Forward Electricity Market (MTE)

venue where Forward Electricity Contracts with delivery and withdrawal obligation are traded.

Forward Gas Market (MT-GAS)

venue for the trading of forward natural-gas contracts with delivery-making/-taking obligation.

Gas Market Participant

natural person (individual) or legal person (organisation) authorised to trade in the Spot Gas Market and in the Forward Gas Market.

GCs

- see Green Certificates (CV in Italian).

Generalised constraints

for each hour, they represent the maximum import and export value for connections with the foreign markets participating in coupling in the NORD zone (XFRA-COUP flow + XAUS-COUP flow + BSP-COUP flow).

Gestore dei Mercati Energetici (GME)

Joint stock company (“società per azioni”) established by GSE. GME is vested with the economic management of the Electricity Market, thus ensuring the availability of an adequate level of Reserve Capacity. Previously known as “Gestore del Mercato Elettrico”, GME changed its registered name on 19 November 2009. In particular, GME manages the Day-Ahead Market (MGP), the Intra-Day Market (MI), the Daily Products Market (MPEG), the Ancillary Services Market (MSD) and the Forward Electricity Market (MTE). GME also manages the Environmental Markets (Energy Efficiency Certificates Market and Market of Guarantees of origin), as well as spot and forward natural gas markets (MGAS) under art. 30 of Law no. 99 of 23 July 2009and enforcing art. 32, para. 2 of Legislative Decree no. 93 of 1 June 2011, as well as the provisions of the AEEGSI Resolution no. 312/2016/R/GAS. GME has also taken over the management of the P-GAS platform and, in the field of fuels, the management of the P-Logistics platform and the PDC-oil. As part of regasification, it organizes and manages the PAR platform.

Gestore dei Servizi Energetici (- GSE SpA)

publicly-owned company (“società per azioni”) playing a central role in promotion, support and development of renewable sources in Italy. GSE’s sole shareholder is the Ministry of Economy and Finance, which exercises its shareholder rights together with the Ministry of Economic Development. GSE controls three subsidiaries: AU (Acquirente Unico); GME (Gestore dei Mercati Energetici); and Ricerca sul Sistema Energetico (RSE).

Gestore della Rete di Trasmissione Nazionale (GRTN)

previous name of Gestore dei Servizi Energetici - GSE, prior to the transfer of part of its assets to Terna S.p.A..

GME

– see Gestore dei Mercati Energetici.

GO Bulletin Board

The GO Bulletin Board is a digital platform that GME organises and manages, under art. 5, para. 5.3 of Ministerial Decree no. 224 of 14 July 2023, with a view to enabling parties interested in concluding long-term GO contracts to enter into contact with one another.

GO Registry

the registry of Guarantees of origin organised and managed by GSE, in which the GOs of each Participant are entered into the related Ownership Account GO, if the Participant is present in the GO Registry with a single Access Profile, or in the related ownership accounts, each corresponding to the single access profiles, if the Participant is present in the GO Registry with multiple access profiles.

Green Certificates (GCs) (the mechanism was terminated pursuant to the provisions of the Decree of the Ministry of Economic Development of 6 July 2012)

under art. 11 of the Ministerial Decree of 18 December 2008 (as subsequently amended and supplemented), Green Certificates give proof of electricity generation from renewables (RES-E). Under Legislative Decree 79/99, producers and importers have the obligation (in effect since 2002) to inject a given quota of RES-E into the power grid every year. This quota is equal to 2% of electricity from non-renewable sources produced or imported in the previous year and exceeding 100 GWh. The quota was increased in subsequent years until reaching 7.55% in 2012. The obligation may also be fulfilled by purchasing a corresponding number of GCs giving proof of RES-E produced by other parties. GCs are issued by GSE at the request of owners of RES-E (“IAFR”) plants. GCs (each of which is worth 1 MWh) are tradable certificates that may be bought or sold in the Green Certificates Market (MCV) or bilaterally. Bilateral transactions must then be registered on the Green Certificates Bilaterals Registration Platform (PBCV). Legislative Decree no. 28 of 3 March 2011, implementing Directive 2009/28/EC on the promotion of the use of energy from renewable sources and amending and subsequently repealing Directives 2001/77/EC and 2003/30/EC, reformed the system of support for RES-E, providing among others that: i) the quota for producers and importers of electricity from conventional sources, starting from its value in 2012, should decrease in subsequent years until reaching zero in 2015; and ii) the current market system based on GCs should be gradually replaced by a feed-in tariff system.

Green Certificates Bilaterals Registration Platform (PBCV) – Disabled on 30-06-2016

the Green Certificates Bilaterals Registration Platform (PBCV) is an electronic platform enabling Participants to register and settle their bilateral transactions on Green Certificates (transfer of ownership) in accordance with the provisions laid down in the PBCV Rules.

Green Certificates Market (MCV) – Disabled on 30-06-2016

venue for the trading of Green Certificates organised by GME as per art. 6 of Ministerial Decree of 11 Nov. 1999, as superseded by the Ministerial Decree of 18 December 2008.

GSE

– see Gestore dei Servizi Energetici - GSE SpA

Guarantee fund

Fund established by CSEA, referred to in ARERA’s Opinion 4/2013/I/GAS and in Resolution 365/2013/R/gas and in Resolution 502/2016/R/GAS, as subsequently amended and integrated by the Regulatory Authority with a dedicated provision.

Guarantees of origin (GOs)

Guarantees of Origin (GOs) are the electronic documents referred to in article 19 of Directive (EU) 2018/2001 and article 46 of Legislative Decree 199/2021. They are aimed at showing to final customers the share or quantity of energy from renewable sources contained in the energy mix of an energy supplier, and that supplied to consumers under contracts for energy produced from renewable sources. GOs are issued by GSE. They are tradable certificates with a value of 1 MWh that can be sold or purchased in the Guarantees of Origin Market (M-GO) or bilaterally, or for which ads are posted on the GO Bulletin Board. Bilateral transactions between participants holding an ownership account with GSE’s GO registry must then be registered on the platform for registration of Bilateral Transactions of Guarantees of Origin (PB-GO), within which the results of assignments made through competitive procedures are also registered by GSE.

Herfindahl-Hirschman Index (HHI)

aggregate market index measuring the degree of concentration and dispersion of Volumes offered and/or sold by Market Participants. The HHI is calculated, for each minimum market time interval and each Macro-Zone, as the sum of the shares of the Volumes sold (or offered) in the market by Market Participants, multiplied by 100 and squared. The value of the HHI may range from 0 (perfect competition) to 10,000 points (monopoly). If the value is below 1,200, the market is competitive; if it is above 1,800, it is poorly competitive. The HHI is computed on the minimum market time interval and then aggregated into monthly simple averages. The shares are defined by considering the Volumes offered and/or sold (including those covered by Bilateral Contracts) by individual Market Participants (aggregated on the basis of their belonging group). GSE is regarded as an individual Market Participant. Formulas

HHI

– see Herfindahl-Hirschman Index.

Hourly Bands

homogeneous hours grouped by expected load level. AEEG’s Decision 181/06 defined the hourly bands applicable from 1 January 2007: F1 - peak-load (on-peak) hours; F2 - mean-load (mid-level) hours; F3 - Low-Load (off-peak) hours.

IDEX (this market is no longer active)

the segment of the financial derivatives market (IDEM) organised and managed by Borsa Italiana S.p.A., where financial electricity derivatives are traded.

IGI

index published by GME for each gas-day and calculated in accordance with what defined in the document available at the link

Imbalance

Differences between actual Injections/Withdrawals and the final Injection/Withdrawal Schedules of a generating/consuming unit or an injection/withdrawal unit. Imbalance charges are applied to such quantities.

Imbalance Charges

charges owed by parties injecting or withdrawing electricity or natural gas into/from the grid or network (BRPs or balancing users, respectively) when they deviate from the basic Injection and Withdrawal Schedules. for the electricity market and the natural gas market, respectively.

Integrated Scheduling Process

- see Balancing and Redispatching Market (MSD).

Intraday Flexibility Market (MI-Flex)

The trading venue for the selection of market participants’ bids/offers that are consistent with the request for Local Ancillary Services relating to the following calendar day, or to the same calendar day on which the MI-Flex sessions are held.

Intra-Day Gas Market (MI-GAS)

The trading venue of gas demand bids and supply offers for the gas-day corresponding the one in which the trading Session opens. The MI-GAS takes place under Continuous Trading.

Intra-Day Market (MI)

venue for trading electricity demand bids and supply offers for each market time interval of the following day, for the purpose of modifying the commercial positions of injection and withdrawal defined in the MGP. It consists of the MI-A and MI-XBID sessions. MI-A refers to the Auction Trading Session of the MI, within which the interconnection capacities between all zones of the Italian market and the interconnection capacity on the borders involved in Market Coupling are allocated. MI-XBID means the Continuous Trading Session of the MI, carried out within the XBID, in which the interconnection capacities between all zones of the Italian market and the interconnection capacity on the borders on which the XBID is active are allocated. Participation in this market is optional.

IOM

– see Marginal Market Participant (or Price-Setting Operator) Indexes.

IOR

– see Residual Supply Index.

IPEX

Italian Power Exchange.

ISP

- see Imbalance settlement period

Issued capacity

the Annual and Multi-Annual Capacity, the Capacity during the Thermal Year as well as the Capacity No Longer Available in auction.

Italian Power Exchange (IPEX)

name under which the Italian Power Exchange is known abroad.

ITM

- see Marginal Technology (or Price-Setting Technology) Index.

IVA

- see Absolute Volatility Index.

IVR

- see Relative Volatility Index.

Kyoto Protocol

international environmental treaty signed in the Japanese city from which it takes its name. The treaty was signed on 11 December 1997 by over 160 countries on the occasion of the Conference of the Parties (COP3) to the United Nations Framework Convention on Climate Change (UNFCCC) and global warming. The treaty entered into force on 16 February 2005, after its ratification by Russia. The treaty requires industrialised countries to sharply cut down their emissions of pollutants (carbon dioxide and five other greenhouse gases, i.e. methane, nitrogen oxide, hydrofluorocarbons, perfluorocarbons and sulphur hexafluoride) by at least 5.2% from their 1990 levels (base-year) in the 2008-2012 period. The protocol also covers the trading (purchase and sale) of greenhouse gas emission units.

Liquidity

ratio of Volumes traded on the Power exchange (MGP) to Total Volumes (including Bilateral Contracts) traded in the “Sistema Italia”.

Local Ancillary Services

The ancillary services that are referred to in article 31 (6) and 31 (7) of Directive (EU) 2019/944 and that are necessary for the efficient, reliable, and secure operation of the distribution system.

Local Flexibility Market (MLF)

The MLF, composed of a forward flexibility market and a spot flexibility market, is the market organised and managed by GME through which the participating Distribution System Operators can procure local ancillary flexibility services, as part of the pilot projects defined pursuant to the Energy, Network and Environment Regulatory Authority Resolution of 3 August 2021 n. 352/2021/R/EEL.

Local Forward Flexibility Market (MLT-Flex)

the market dedicated to the trading of forward products.

Local Spot Flexibility Market (MLP-Flex)

the market combining the day-ahead flexibility market (MGP-Flex) and the Intraday Flexibility Market (MI-Flex) and dedicated to the trading of spot products.

Low-Load Hours

– see Off-Peak Hours.

Macro-Zone

aggregation of Geographical and/or Virtual Zones that is conventionally defined for the production of statistical market indexes. A Macro-Zone has a low frequency of market splitting and a homogeneous trend of selling Prices. From 1 Apr. 2004 to 31 Dec. 2005, Macro-Zones were as follows: NORD (northern Italy, including northern zones, Monfalcone, Turbigo), CENTRO SUD (central-southern Italy, including central-northern zones, central-southern zones, southern zones, Piombino, Rossano, Brindisi), SICILY (including the zones of Calabria, Sicily and Priolo), and SARDEGNA (including the Zone of Sardinia). From 1 Jan. 2006 to 31 Dec. 2008, Macro-Zones were as follows: MzNord (including northern zones, Monfalcone, Turbigo), MzSicilia (including the zones of Sicily and Priolo), MzSardegna (including the Zone of Sardinia), MzSud (including the remaining zones). Since 1 Jan. 2009, Macro-Zones have been as follows: MzNord (including northern zones and Monfalcone), MzSicilia (including the zones of Sicily and Priolo), MzSardegna (including the Zone of Sardinia), MzSud (including the remaining zones).

Marginal Market Participant (or Price-Setting Operator)

Market Participant that has set the selling price in each hour and in each Zone.

Marginal Market Participant Index (or Price-Setting Operator Index – IOM)

index referring to individual Market Participants that have set the selling price at least once. For each Market Participant, in each period of time and each Macro-Zone, the index is defined as the share of the Volumes on which the Market Participant has set the price, i.e. as the ratio of the sum of the Volumes sold (including Bilateral Contracts), in the Geographical zones (included in the Macro-Zone) where the Market Participant has set the price, to the sum of the overall Volumes sold in the Macro-Zone. The IOM is calculated directly on a monthly basis. Formulas

Marginal Technology Index (or Price-Setting Technology Index – ITM)

index entirely similar to the IOM (i.e. Marginal Market Participant Index). It takes into consideration the technology used for power generation rather than the Market Participant. Formulas

Margins

step-up and step-down margins express the maximum volume that can be sold or purchased in the same market time interval in the portfolio to which the margins refer.

Market Clearing Price (MCP)

equilibrium price; by extension, it identifies the rule for remunerating Offers/Bids that are accepted in the Day-Ahead Market and in the Intra-Day Market on the basis of the price of the Marginal Offer/Bid.

Market Coupling

mechanism of co-ordination between regulated electricity markets in different national states, having the purpose of managing congestions on interconnected networks (cross-border trade). The goal of market coupling is to maximise the use of interconnection capacity under cost-effectiveness criteria (ensuring that electricity flows are directed from markets with lower Prices towards those with relatively higher Prices).

Market for certificates of release to consumption of biofuels (MCIC)

the CIC trading market, organized and managed by GME pursuant to article 6, paragraph 5 bis, of the Ministerial Decree of 10 October 2014.

Market Participant

natural or legal person admitted to operate in the Electricity Market.

Market Resolution

process of acceptance of Offers/Bids submitted into the market; the process determines the accepted Offers/Bids, the price at which Offers/Bids are valued, the commercial positions of injection and withdrawal of the portfolios to which Offers/Bids refer. In the electricity markets, market resolution takes place after the close of the Sitting and it uses a marginal-price auction mechanism (MGP, MI-A) and a pay-as-bid auction mechanism (MI-XBID, MSD).

Market Results

market results derive from the process of Market Resolution. They include both public and confidential results. For each Applicable Period and each Zone (in the case of the Electricity Market), the public results include the Clearing Price, the Total Volumes Sold and the Total Volumes Purchased; these results are posted at www.mercatoelettrico.org. For each minimum market time interval and each bid/offer, the confidential results include the acceptance/rejection of the bid/ask, the Prices and Volumes recognised, the reasons for the possible rejection, and the commercial position of injecion or withdrawal (in the case of the Electricity Market); these results may only be accessed by holders of bids/offers at https://www.ipex.it for the Electricity Market and at https://gas.ipex.it/MGasWebSite/ for the Gas Market.

Market Shares

share of overall sales made by a Participant in the Day-Ahead Market (MGP), including the Volumes covered by Bilateral Contracts.

Market Time Interval

time interval to which bids/offers in the MGP and MI are referred and whose duration corresponds to one or more Imbalance Settlement Period/s (ISP/s).

MCP

– see Market Clearing Price.

MCV

– see Green Certificates Market.

ME

– see Electricity Market.

Merit Order

criterion used for ranking Offers/Bids. For each market time interval, supply offers are ranked by non-decreasing price order, whereas demand bids are ranked by non-increasing price order. If supply offers and demand bids have the same price, reference is made to the priority criteria set forth in the combined provisions of the Integrated Text of the Electricity Market Rules and of the Dispatching Rules for the Electricity Market, as well as of the Gas Market Rules for the Gas Market.

Merit-Order Dispatch (or Economic Dispatch)

activity that GME carries out on behalf of Terna S.p.A. in accordance with art. 5.2 of Legislative Decree 79/99, with the provisions of ARERA Resolutions TIDE and 48/04, as well as with the Integrated Text of the Electricity Market Rules. This activity consists in determining the commercial positions of injection and withdrawal of portfolios on the basis of the Offer Price and, if this price is equal, on the basis of priorities specifically assigned to the different types of unit by Terna S.p.A.. In particular, supply offers are accepted – and thus commercial positions of injection are determined – by increasing offer price order, whereas demand bids are accepted - and thus commercial positions of withdrawal are determined - by decreasing offer price order. Furthermore, Offers/Bids are accepted consistently with the Transmission Limits between pairs of Zones that are daily defined by Terna S.p.A.

MGAS Netting markets

The set of Day-Ahead Market (MGP-GAS), the Intra-Day Gas Market (MI-GAS), including the Segment for the supply of system gas (AGS), the Locational Products Market (MPL) and the Regulated Market for the trading of gas stored (MGS).

M-GO

the GO Market, i.e. the venue for the trading of GOs organised and managed by GME.

MGP

– see Day-Ahead Market.

MGP-Flex

see Day-Ahead Flexibility Market.

MGS

regulated market for the trading of gas stored (MGS): the market in which the trading of stored gas demand bids and supply offers takes place for each gas-day immediately before the one of the Session closure.

MI

– see Intra-Day Market.

MI-Flex

see Intraday Flexibility Market.

Ministerial Decree of 18 March 2010

the Decree of the Minister of Economic Development of 18 March 2010 concerning the procedure under which importers shall fulfil the obligation referred to in Article 11, para. 2 of Law-Decree 7/07, as a result of the provisions of Article 30, para. 2 of Law 99/09, as well as the procedure under which GME shall - in the first implementation stage of Article 30, para. 2 of Law 99/09 - take on the responsibility of managing supply offers and demand bids for the quotas of imported gas referred to in Article 11, para. 2 of Law-Decree 7/07.

MLF

see Local Flexibility Market.

MLF-Enabled User

A party that the DSO has designated as BSP to offer Local Ancillary Services, for one or more distributed resources within his/her/its availability, to the same DSO.

MLP-Flex

see Local Spot Flexibility Market.

MLT-Flex

see Local Forward Flexibility Market.

Movement Schedule

schedule determined by Terna for the units participating in the MSD and made available to the related BSP at the same time as the publication of the results of the MSD itself, in accordance with the Dispatching Rules.

MPE

- see Spot Electricity Market.

MPL

locational products market (MPL): market in which sessions are held at the request of the Balance Responsible Party and dedicated to the trading of demand bids and supply offers of gas related to the same gas-day of the Session or the gas-day immediately after, necessary to manage the physical requirements within the balancing Zone or any deviations expected between overall injections and withdrawals from/to the network.

MSD

– see Integrated Scheduling Process.

MTE

- see Forward Electricity Market.

Multiple Market Time Intervals

plurality of market time intervals of different duration, in respect of which bids/offers may be submitted into the MGP, MI-A or MI-XBID.

National Demand

electricity demand to be covered by the national power system. This value, which is variable for each minimum market time interval, includes consumption by final Customers, but does not include consumption for Pumped-Storage plants, and exports. The forecast national demand in each Zone is published by Terna S.p.A. and by GME in the Preliminary Information one day in advance.

National Transmission Grid (RTN)

Nation power Transmission grid as defined by the Decree of the Minister of Industry of 25 June 1999, as amended.

Natural-Gas Market

the market consisting of the MGP-GAS, the MI-GAS, MPL, MGS and the MT-GAS.

Netting Markets

The set consisting of the Netting Markets of the ME and the netting markets of the MGAS, considered as whole for the purpose of verifying the adequacy of the capacity of the guarantees, the offsetting and settlement of the related payments, as well as default.

Netting Markets of the ME

The set consisting of the Day-Ahead Energy Market (MGP) and the Intra-Day Market (MI).

Nomination Platform (PN)

platform organised and managed by GME pursuant to ARERA Resolution 345/2023/R/EEL, as subsequently amended and supplemented, to allow the nomination of commercial positions on units, resulting from the MGP and MI.

Non-Arbitrage Fee

fee calculated for each demand bid/supply offer accepted in the MI in respect of withdrawal portfolio. The fee is equal to the product between the accepted volume and the difference between the zonal price and the PUN Index GME. The Participant that has submitted the bid/offer pays this fee if negative/positive or receives this fee if positive/negative.

Notice Section

The on-line report of the PPA BULLETIN BOARD within which participants can publish and view the purchase and sale notices of PPA contracts, as well as express interest in these notices.

Offer Point (“Supply Point”)

for MGAS, point of entry into and/or exit from the transmission network to which the Quantity covered by demand bids and supply offers in the MPL refers.

Offers/Bids

In GME’s Spot Electricity Market (MPE), four types of offers/bids may be submitted: Simple Offer/Bid: - in the energy markets, an offer/bid specifying the Volumes of energy offered for purchase or sale and a unit purchasing or selling price, as well as any other possible information as defined in the Integrated Text of the Electricity Market Rules; it may refer to a zonal portfolio, a market, a simple or block product, and to a market time interval or multiple time intervals having the same duration, respectively. - in the MSD, an offer/bid specifying a volume of energy offered for purchase or sale at a unit purchasing or selling price, as well as any other information as defined in the Dispatching Rules; it refers to a unit and to an Imbalance Settlement Period (ISP). Multiple Offer/Bid: an offer/bid consisting of a number of simple offers/bids submitted by the same participant for the same simple product, pertaining to the same market time interval, and referring to the same zonal portfolio. Pre-Defined Offer/Bid: a simple or multiple offer/bid that is deemed to have been submitted by a market participant in each sitting of the MGP and MSD in which GME does not receive any offers/bids from the same market participant. Balanced Offer/Bid: a simple supply offer, at a price equal to the minimum technical limit, and a simple demand bid, at a price equal to the maximum technical limit, which are submitted in each sitting of the MI-A, even by different market participants, provided that they refer to the same market time interval and to zonal portfolios belonging to the same bidding zone, such that the respective Volumes are balanced and that they are identified as mutually balanced through an appropriate alphanumerical code chosen by market participants. CET offer/bid: a supply offer or demand bid on a forward account (conto energia a termine – CET), to be submitted into the MGP, which corresponds to the conversion of the commercial position on a forward account (schedules). Marginal Offer/Bid: in each Market Zone and each minimum market time interval, the offer/bid with the highest Merit Order that has been accepted. PAR bid: a demand bid for regasification capacity submitted by participants in each Order Book of the PAR.   In GME’s Spot Gas Markets, the following types of offers/bids may be submitted: For the MGP-GAS and MI-GAS: - valid until cancellation: the bid/offer is executed, even in part, for the available Volumes and on the price terms specified by the Market Participant. Any unexecuted volume is reproposed in the order book until the end of the session, when it is automatically cancelled; - valid until expiration: the bid/offer is executed, even in part, for the available Volumes and on the price terms specified by the Market Participant. Any unexecuted volume is reproposed in the order book until the expiration specified in the bid/offer, when it is automatically cancelled; - execute and cancel: the bid/offer is executed, even in part, for the available Volumes and on the price terms specified by the Market Participant. Any unexecuted residual volume is automatically cancelled; - execute or cancel: the bid/offer is only executed for the entire volume and on the price terms specified by the Market Participant. If, upon entry into the order book, this is not possible, then the bid/offer is automatically cancelled. For the MPL, MGS and AGS - Simple Offers/Bids: they consist of a volume (MWh) – price (€/MWh) pair, where the volume expresses the maximum willingness to sell or purchase gas and the price represents the maximum purchasing price or minimum selling price that is requested. In the case of demand bids, a “0” price expresses the willingness to buy at any price. - Multiple Offers/Bids: they consist of multiple pairs of simple Offers/Bids. Each offer/bid represents a distinct offer/bid.

Off-Peak Hours

From 1 Apr. 2004 to 31 Dec. 2005: all the hours of non-working days (holidays); on working days, the hours from 0:00 to 07:00 and from 22:00 to 24:00, i.e. the applicable periods from 1 to 7, 23 and 24. From 1 Jan. 2006: all the hours of non-working days (holidays); on working days, the hours from 00:00 to 08:00 and from 20:00 to 24:00, i.e. the applicable periods from 1 to 8 and from 21 to 24

OLT segment

Segment of the PAR dedicated to the trading of regasification capacity slots available at the regasification terminal managed by OLT Offshore Toscana S.p.A, also in implementation of the provisions of the regasification code.

On-Exchange Volumes

– see Power Exchange Volumes.

On-Peak Hours

From 1 Apr. 2004 to 31 Dec. 2005: on working days only, the hours from 07:00 to 22:00, i.e. the applicable periods from 8 to 22. From 1 Jan. 2006: on working days only, the hours from 08:00 to 20:00, i.e. the applicable periods from 9 to 20.

Order Book

a screen report displaying the set of trading orders that Market Participants have entered into the information system. The orders are ranked by price and entry time.

OTC Contract

– see Bilateral Contract.

Over-the-Counter Contract

– see Bilateral Contract.

Ownership Account CIC (CIC)

shall mean: i. if the participant is enabled on the BIOCAR Portal with a single Access Profile, the BIOCAR Portal account associated by GSE with the participant access profile; ii. if the participant is enabled for the BIOCAR Portal with different access profiles, the accounts of the BIOCAR Portal, distinct from each other, associated by GSE with each Access Profile to which the participant is enabled.

Ownership Account GO (GOs)

i. if the Participant is present in the GO Registry with a single Access Profile, the account of the GO Registry that GSE has associated with the Participant’s access profile; ii. if the Participant is present in the GO Registry with multiple access profiles, each of the different accounts of the GO Registry that GSE has associated with each of the Participant’s access profiles.

PAR

trading platform organised and managed by GME for the allocation of regasification capacity in compliance with the provisions of Article 5, paragraph 5.11, of the TIRG.

PAR Participant

the party allowed to operate on the PAR.

Pay as bid

in the MSD: valuing rule under which each bid/offer is valued at its offer price. on the PAR: trading method that involves the submission, modification and cancellation of trading orders in a specific time interval, in order to conclude transactions valued at the price associated with the accepted demand bid.

PB-GAS

platform regulated and managed by GME pursuant to Resolution 312/2016/R/GAS of the Regulatory Authority until 31 March 2017.

PB-GO

platform for registering Bilateral transactions of GOs, as well as Bilateral transactions resulting from Auctioning Procedures.

PCE

- see Forward Account Registration Platform (PCE).

PCR

- see Price Coupling of Regions.

Peak-Load Hours

– see On-Peak Hours.

P-GAS

platform, organised and managed by GME, for the trading of natural gas Bids/Offers; it consists of the Imports’ Segment, of the Royalties’ Segment and of the Segment referred to in Legislative Decree 130/10.

P-GAS Buying Participant

a P-GAS Participant who/which may submit only demand bids.

P-GAS Importer

the party to whom/which the Ministry of Economic Development has granted authorisations to import gas under art. 3 of Legislative Decree 164/00, as subsequently amended by art. 28 of Legislative Decree no. 93 of 1 June 2011. A P-GAS importer is required to bid quotas of imported gas under Law no. 40 of 2 April 2007.

P-GAS Offers/Bids

trading orders: demand bids or supply offers that Participants enter into the order books or the auctions of the P-GAS and that contain the necessary data for posting and execution.

P-GAS Participant

an individual or organisation admitted to trading on the P-GAS.

P-GAS Reference Price

average price per GJ, weighted for the related quantities, of all transactions executed during a Session of the Imports’ Segment of the P-GAS.

P-GAS Selling Participant

P-GAS Participant that has submitted to GME the documents required to acquire such status and that may enter both supply offers into the order books or auctions for which he/she/it is authorised and demand bids for Volumes of gas offered by other sellers in accordance with the P-GAS Regulations.

P-GAS Terms and Conditions of Supply

terms and conditions which are specified in the contract of supply and/or purchase/sale of gas and in the related documents, if any, and which are applied by the selling participant, including requirements or obligations to be fulfilled prior to the contract.

PGN

– see Wholesale price.

Physical Balance of a Forward Account

with regard to each market time interval the algebraic sum of the net position of the forward account and of CET bids/offers registered on the same account.

Point of Limited Production (or Pole of Limited Production)

– see Constrained Zone.

Power Exchange

virtual venue where wholesale electricity supply and demand meet. GME is vested with the management of transactions on the Power Exchange under art. 5 of Legislative Decree 79/99.

PPA BULLETIN BOARD (PPA)

PPA contracts bulletin board organised and managed by GME in implementation of the provisions of article 28, paragraph 1, of Italian Legislative Decree no. 199.

PPA Contract

Contract for the Purchase and Sale of Electricity from Renewable Sources, regulated by physical delivery of the negotiated electricity, referred to in article 28 of Italian Legislative Decree of 8 November 2021, no. 199.

Preliminary Information

information that GME receives from Terna S.p.A. at least before the close of the sittings of both the Day-Ahead Market and the Intra-Day Market.

Price Coupling of Regions (PCR)

co-operation project among European market operators for the operational management of market coupling among the respective day-ahead markets.

Prices

In GME’s markets, prices are expressed in €/MWh, specified to the second decimal figure for the Electricity Market and to the third decimal figure for the gas market. On the P-GAS, prices are expressed in cents of €/GJ, specified to the fourth decimal figure on the imports and royalties segments, and in €/MWh, specified with three decimals in the segment as per Legislative Decree 130/10. All prices are rounded off under the commercial criterion. - Check Price: price determined by GME for the purposes of adequacy verifications in the MTE and MGAS. - Check price of the MPEG: parameter determined by GME in order to carry out adequacy verifications in the MPEG and whose definition criteria are identified in the Technical Rules. - Clearing Price: it generally identifies the price that is set in the MGP, MI, MPL, and MGS at the intersection of demand and supply curves, so as to balance demand with supply, maximise social welfare, and perform efficient transactions. In the Electricity Market, the clearing price is determined for each minimum market time interval and, if the market is split into 2 or multiple Zones, both in the MGP and in the MI, it may be different in each Market Zone (Zonal Price). In the MGP, the zonal clearing price may be applied to all supply offers or demand bids. - Conventional Price of the MGP: unit electricity price (defined in art. 2, para. 2.1 ddddd) of the Integrated Text of the Electricity Market Rules and in the Technical Rules) at which bids/offers are conventionally priced for the purpose of verifying the adequacy of the available amount of financial guarantees. - Cumulative price of Green Certificates (the platform for trading Green Certificates is no longer active from 30 June 2016): average price of Green Certificates having the same reference year; this price is weighted for the Volumes traded in GME’s regulated market, considering all the sessions in which such Green Certificates have been traded. This price is monthly updated. - Maximum Price: maximum price of transactions carried out during a continuous-trading Session. - Minimum Price: minimum price of transactions carried out during a continuous-trading Session. - Offer Price: price quoted in a bid/offer. Bids/offerss that are accepted in the MSD are valued at the offer price. - Price of the MPEG product: price specified by the Participant in the submission of bids/offers and corresponding to: - in the case of the "unit price differential" product, the algebraic sum of the price of the product and of the average of the prices referred to in Article 42 of the Integrated Text of the Electricity Market Rules and determined in the hours included in the daily product type being offered in the MPEG; - in the case of the "full unit price" product, the price of the same product. - PUN Index GME: average of Zonal Prices in the Day-Ahead Market, weighted for total purchases pertaining to physical or commercial withdrawal portfolios. - Reference Price: average price referred to 1 MWh, weighted for the related Volumes, of all transactions executed during a market Session. - Settlement Price of the MPEG product: - in the case of the " unit price differential" product, the algebraic sum of the price of the product and of the average of the prices referred to in Article 42 of the Integrated Text of the Electricity Market Rules and determined in the hours included in the daily product type being offered in the MPEG; - in the case of "full unit price" product, the price of the product itself. - Unconstrained Price: virtual price determined when there are no Transmission capacity constraints. - Zonal Price (Pz): clearing price in each Geographical and Virtual Zone.

Price-Setting Operator

- see Marginal Market Participant.

Price-Setting Operator Index

- see Marginal Market Participant Index.

Price-Setting Technology Index

- see Marginal Technology Index.

Primary capacity

the annual and multi-annual regasification capacity as well as the current thermal year capacity available for allocation at each regasification terminal.

Priority end customer

The priority end customer defined by Decree N. 341 of 16.09.2022 by the Minister for the Ecological Transition, implementing for the first time the provisions of Article 16-bis of Decree-Law N. 17 of 2022, converted with amendments into Law n. 34 of 27 April 2022.

PSV

Sistema per Scambi/Cessioni di Gas al Punto di Scambio Virtuale – modulo PSV (gas trading system at the Virtual Trading Point - PSV), referred to in AEEG’s Decision 22/04 and organised and managed by Snam Rete Gas.

PSV Identification Code

PSV Identification Code shall mean the code adopted by the company Snam Rete Gas which identifies the participant admitted to access the gas trading system at the Virtual Trading Point – PSV form.

PSV User

a party authorised to operate at the PSV.

Pumped-Storage (Unit)

generating unit of a pondage hydro power plant permitting the pumping of water into upper basins. These units are related to injection units authorised to submit both supply offers and demand bids into the Day-Ahead Market.

PZ

– see Prices.

Quantities/Volumes

for electricity markets: volumes of electricity covered by demand bids and supply offers. These volumes are expressed in MWh, specified with one decimal; - Off-Exchange Volumes: volumes of electricity sold/purchased through Bilateral Contracts. On the supply side, they include: all OTC sales, net of CET supply offers registered on the PCE. On the demand side, they include all OTC purchases, net of CET demand bids registered onto the PCE; - Power Exchange Volumes (or On-Exchange Volumes): volumes of electricity traded by Market Participants in the Day-Ahead Market (MGP). On the supply side, they include: all the sales made on the Power Exchange and the balance (if positive) between all CET offers/bids for injection/withdrawal related to OTC contracts registered on the PCE. On the demand side, they include: all the purchases made on the Power Exchange and the balance (if positive) between all CET bids/offers for withdrawal/injection related to OTC contracts registered on the PCE; - Total Volumes (“Sistema Italia”): overall volumes of electricity traded in the “Sistema Italia”, equal to the sum of On-Exchange Volumes and of Off-Exchange Volumes; - Unconstrained Volume (NAT): virtual volume determined when there are no Transmission capacity constraints. For gas markets and platforms: volumes of gas covered by demand bids and supply offers. These volumes are expressed as follows: • in the MGAS, in MWh/day, specified with three decimals; • on the P-GAS, in GJ in the imports and royalties segments and in MWh in the segment as per Legislative Decree 130/10;

Ramp Constraints

for each hour, they represent the maximum value of the variation of the energy flow for connections with the foreign markets participating in coupling in the NORD zone (XFRA-COUP flow + XAUS-COUP flow + BSP-COUP flow), both increasing and decreasing between one hour and the previous one.

RECOs (Renewable-Energy Certificates of Origin)

the Guarantees of origin referred to in AEEG’s Decision ARG/ELT 104/11 and issued by GSE before 31 March 2013.

Relative Volatility Index (IVR)

index of relative volatility of Prices. It measures the variability of the phenomenon in a given period of time with a pure number (i.e. without unit of measurement), thereby facilitating comparisons of price volatility indexes in different geographic areas or periods of time. With reference to one month, the IVR is calculated as the weighted average of the coefficients of variation, i.e. the ratio of the standard deviation to the average price in each minimum market time interval of a working day and of a holiday. For longer periods (quarter, half-year, year, ...), the index is calculated as the weighted average of the volatility indexes in the months of the period.

RES-E

electricity generated from renewable energy sources.

Reserve

capacity margin with respect to forecast demand that Terna S.p.A. creates to offset deviations between electricity generation and consumption.

Reserve Capacity

share of capacity that is not used on a scheduled basis to cover imbalances between generation and load due to random variations in demand, demand forecast errors, unplanned unavailability of generating capacity (e.g. faults) and unplanned changes in cross-border trade schedules. Generally, based on the status of the units that can be made available, Reserve capacity may be classified in two categories: spinning Reserve and cold Reserve.

Reserve Price of Issued capacity

Reserve price determined by the user that has issued the regasification capacity, which constitutes the minimum admissible auction price, in respect of which orders submitted by participants are included in the merit order or rejected for the purpose of the auction.

Reserve Price of Primary Capacity

Reserve price determined by each regasification company on the basis of the criteria defined by ARERA with a specific resolution, which constitutes the minimum admissible auction price, in respect of which orders submitted by Participants on the PAR are included in the merit order or rejected for the purpose of the auction.

Residual Supply Index (IOR)

index referring to individual Market Participants that submit offers into the market. The index measures the presence of residual Market Participants, i.e. those that are necessary to cover demand. Unlike the RSI reported in the literature, the IOR is defined, for each Market Participant, as the ratio of the overall volumes offered by competitors (in lieu of available capacity) to the overall Volumes sold (in lieu of the internal demand of each Zone, net of the maximum import capacity or increased by the maximum export capacity). Thus, the index measures the ex-post residuality. The IOR is 1 when there is one residual Market Participant; the closer is the index to 0, the higher will be the share of the Market Participant’s offer that can be sold, regardless of its Offer Price. The IOR is calculated by aggregating the Volumes offered by individual Market Participants (aggregated on the basis of their belonging group), including the Volumes covered by Bilateral Contracts. Also in this case, GSE is regarded as an individual Market Participant. Formulas Of this index, two derivations are published. The first is IORh(i), which represents the non-contestable market frequency. This index is calculated, for each macro-zone and each Market Participant, as the percentage of minimum market time intervals during which the Market Participant has been necessary. An aggregated version of the index (IORh) is also provided; this index is calculated, for each Macro-Zone, as the percentage of minimum market time intervals during which at least one Market Participant has been necessary. Formulas The second derivation is IORq(i), which represents the share of non-contestable sales made by each Market Participant. This index is calculated, for each macro-zone, as the ratio of the non-contestable Volumes (obtained from the IORi as the difference between the numerator and the denominator) to the sales made by the Market Participant. Of the same index, an aggregated version (IORq) is also provided; this index is calculated, for each macro-zone, as the ratio of the sum of the non-contestable Volumes of all Market Participants to the overall sales. Formulas

RTN

– see National Transmission Grid.

Scambio

service that Gestore dei Servizi Energetici provided throughout the duration of Stage 2 as part of its electricity dispatching service; the service consisted in offsetting the differences between electricity injections and withdrawals into/from the grids having third-party connection obligation; it was provided to the customers of the eligible market and to wholesale customers. Stage 2 ended on 31 December 2004.

Secondary capacity

regasification capacity issued by the user of the regasification and made available again by the same user to the regasification company for the purpose of a subsequent allocation.

Segment for the supply of system gas (AGS)

Segment for the supply of system gas (AGS) shall mean the segment whose sessions are carried out in the MGP-GAS and MI-GAS, in which the Balancing User procures the resources necessary for the functioning of the gas system in compliance with ARERA Resolution 451/2019/R/Gas, and those necessary for the Default Gas Transmission Service under ARERA Resolution 374/2024/gas.

Session

set of activities directly related to receipt and processing of Offers/Bids, as well determination of the corresponding Market Results.

Settlement

set of activities consisting of billing, invoicing, and payment of payables/receivables arising from the Electricity Market and from the Gas Market.

Sitting

period of time within which Offers/Bids are to be received in order to be considered as valid.

Snam Rete Gas

Snam Rete Gas S.p.A., a company established on 15 November 2000 to carry out activities of transmission and dispatching of natural gas; Snam Rete Gas organises and manages the PSV system under AEEG’s Decision 22/04, as subsequently amended and supplemented.

Spot Contract

a contract admitted to trading in the spot market and concerning the trading of spot supplies of electricity and natural gas.

Spot Electricity Market (MPE)

the set of the Day-Ahead Market (MGP), of the Intra-Day Market (MI), the Daily Products Market (MPEG) and of the Ancillary Services Market (MSD).

Spot Gas Market

the regulated gas market, consisting of the Day-Ahead Gas Market (MGP-GAS) and of the Intra-Day Gas Market (MI-GAS).

Stage 1

period of market trading tests, which preceded the take-off of the Power Exchange. It ended on 30 March 2004.

Stage 2

period of operation of the Power Exchange characterised by a transitional system of demand management, in which final customers or their Wholesalers could not submit demand bids into the Power Exchange or report hourly Withdrawal Schedules (the so-called “Scambio”). In this stage, Gestore dei Servizi Energetici daily purchased on the Power Exchange the Volumes required to cover the National Demand estimated for the next day, in each hour and in each Zone, and resold such Volumes both to AU (for Captive Customers) and to Eligible Customers at the monthly average price, differentiated by Hourly Bands, applied to the difference between their actual consumption and the planned value of the sales to such customers under Bilateral Contracts. This Stage ended on 31 December 2004.

Stage 3

period of operation of the Power Exchange in which the demand side fully participates in the Power Exchange, by submitting demand bids, and enters into Bilateral Contracts, by nominating hourly Withdrawal Schedules. In this stage, the electricity purchased on a scheduled basis is valued at the hourly purchasing price, for purchases on the Power Exchange, and at the price specified in Bilateral Contracts, for purchases off the Power Exchange. Conversely, the electricity consumed or not consumed (i.e. deviating from hourly schedules) is valued on the basis of Imbalance charges. This period began on 1 January 2005.

Standard-Offer Market (“servizio di maggior tutela”) Customers

since 1 July 2007, all household customers and small companies, having all of their withdrawal points connected at low voltage, have become entitled to participate in this market.

Supply Curve

segment of line on the volume-unit price plane, which refers to a minimum market time interval and which is obtained by cumulating Supply Offers verified to be technically adequate and ranked by non-decreasing unit price order.

Supply Point

– see Offer Point.

TEE

– see Energy Efficiency Certificates.

TEE Register

database of Energy Efficiency Certificates managed by GME and divided into ownership accounts.

TEE relevant monthly price of bilateral transactions

relevant monthly price of Bilateral transactions means: i. the average price for one toe, weighted by the related Volumes of the Bilateral transactions concluded during the corresponding calendar month, at a price below 250€/TEE and not excluded from the interval between the value referred to in paragraph 3.2, subpara. a), and the value referred to in paragraph 3.2, subpara. b) of Article 3 of Annex A to Resolution 487/2018/R/efr, with a dimensionless parameter a equal to the value referred to in paragraph 3.3 of the same article; or ii in the event that the relevant monthly volume is zero, respectively: the value referred to in paragraph 3.2, subpara. a), of Article 3, of Annex A to Resolution 487/2018/R/efr, with a dimensionless parameter equal to the value referred to in paragraph 3.3 of the same article, if more than half of the Volumes covered by Bilateral transactions have been concluded at a lower price than the one referred to in the same paragraph 3.2, subpara. a), of Article 3, of Annex A to the resolution 487/2018/R/efr; the value referred to in paragraph 3.2, subpara. b) of Article 3, of Annex A to the resolution 487/2018/R/efr, with a dimensionless parameter a equal to the value referred to in paragraph 3.3 of the same article, if more than half of the Volumes covered by Bilateral transactions have been concluded at a price higher than that referred to in the same paragraph 3.2, subpara. b) of Article 3, of Annex A to Resolution 487/2018/R/efr; the average of the values referred to in paragraph 3.2, subpara. a) and b) of Article 3, of Annex A to the resolution 487/2018/R/efr, with a dimensionless parameter a equal to the value referred to in paragraph 3.3 of the following paragraph of the same article, if half of the Volumes covered by Bilateral transactions have been concluded at a lower price and half of the Volumes involved in Bilateral transactions have been concluded at a higher price, respectively those referred to in the same paragraph 3.2, subpara. a) and b), of Article 3, of Annex A to Resolution 487/2018/R/efr.

Terna - Rete Elettrica Nazionale SpA

company in charge of electricity Transmission and dispatching over the high-voltage (HV) and extra-high voltage (EHV) grid throughout Italy. Its current structure results from the acquisition (November 2005) of part of the assets of GSE, as set forth in Prime Minister’s Decree of 11 May 2004. Terna is a listed company. Its shares were first traded on the Stock Exchange on June 2004. Currently, its relative majority shareholder is “Cassa Depositi e Prestiti”, having a stake of 29.99%.

Terna S.p.A.

- see Terna - Rete Elettrica Nazionale SpA.

Toe (tonne of oil-equivalent)

conventional unit used in energy accounting to express all the energy sources (taking into account their calorific value) in a common unit of measurement.

Trading Period

period during which Forward Contracts are traded.

Transmission

activity consisting in transmitting and transforming electricity on the interconnected high- and extra-high-voltage grid in order to deliver it to customers, distributors and users of self-generated electricity.

Transmission Limits (or Transit Limits)

maximum electricity Transmission capacity between a pair of Zones; it is expressed in MWh. The Transmission limits are part of the Preliminary Information that Terna S.p.A. daily notifies to GME and that GME posts on its website. GME uses these limits for Market Resolution in the Day-Ahead Market and Intra-Day Market.

Unconstrained

virtual price or volume defined when there are no Transmission constraints.

Unit

In electricity markets, a unit is a physical, commercial or import/export unit in respect of which demand bids and supply offers are submitted and basic injection and withdrawal schedules are defined. Units are distinguished into injection and withdrawal units.

User admitted to the MGS

User admitted to MGS shall mean the MGAS Market Participant admitted to one or more storage companies.

User admitted to the MPL

User admitted to MPL shall mean the Market Participant authorized by Snam Rete Gas to submit Bids/Offers regarding the Offer Points in his/her/its possession

User authorised for the energy release section

The operator, a Priority end customer or an aggregator of priority end customers, designated by Gestore dei Servizi Energetici – GSE S.p.A., that can submit offers under the Energy release section under Decree N. 341 of 16.09.2022 by the Minister for the Ecological Transition, implementing for the first time the provisions of Article 16-bis of Decree-Law N. 17 of 2022, converted with amendments into Law n. 34 of 27 April 2022, with respect to one or more customer profiles.

Variation Coefficient (CV)

index of price volatility, which is calculated as the ratio of the standard deviation to the absolute value of the average of hourly prices, expressed in percentage. It is a relative dispersion index, which compares phenomena of different number and with different units of measurement, because it is a pure number (i.e. without unit of measurement).

Volumes/Quantities

– see Quantities/Volumes.

White Certificates

– see Energy Efficiency Certificates.

Wholesale price (PGN)

estimated yearly average of a given component of the price at which electricity is sold to distributors for resale to the captive market; such component covers the purchasing and operating costs of Acquirente Unico. It is expressed in €cent/kWh. Before the take-off of the Power Exchange, the value of the PGN was administratively set by AEEGSI and consisted of: i) one component covering variable costs, which was quarterly adjusted and based on the trend of Prices of a basket of fuels; and ii) one component covering fixed costs, differentiated in the various Hourly Bands.

Wholesaler

any natural person or legal person buying and selling electricity with a view to reselling it inside or outside the system where he/she/it is established.

XBID (Cross Border Intraday)

the common platform, defined as part of the cooperation project between the market operators and European market operators and transmission system operators, for the operational management of the sessions of the intraday markets with Continuous Trading, organised and managed by the market operators participating in the same XBID.

Zonal portfolio

a physical zonal portfolio or a commercial zonal portfolio, in respect of which a Participant is entitled to submit bids/offers.

Zone

portion of the power grid where, for system security purposes, there are physical limits to transfers of electricity to/from other Geographical Zones. The Zones are defined by TERNA SpA and approved by ARERA. At present, the zones are as follows: Geographical Zone: representing a portion of the national grid. Geographical zones are northern Italy (NORD), central-northern Italy (CNOR), central-southern Italy (CSUD), southern Italy (SUD), Calabria (CALA), Sicilia (SICI), Sardegna (SARD); Foreign Virtual Zone: point of interconnection with neighbouring countries. It includes: France (FRAN), Switzerland (SVIZ), Austria (AUST), Slovenia (SLOV), Slovenia Coupling representing the interconnection dedicated to Market Coupling between Italy and Slovenia (BSP); Corsica (CORS), Corsica AC (COAC), Greece (GREC), France coupling (XFRA), Austria coupling (XAUS), Malta (MALT), Montenegro (MONT), Greece Coupling (XGRE) and Italy coupling (COUP). Market Bidding Zone: aggregation of Geographical and/or Virtual Zones such that the transit flows between the same zones are lower than the Transmission Limits notified by Terna SpA. This aggregation is defined on the basis of the minimum market time interval as a result of the resolution of the Day-Ahead Market and Intra-Day Market. In the same hour, different Market Bidding Zones may have non-different Zonal Prices.

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