ANNUAL REPORT 2011 - DONG Energy

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Glossary
2p reserves: Sum of Proved reserves plus Probable reserves
(Society of Petroleum Engineers and World Petroleum
Congress (SPE/WPC) reserve classification standards).
apX: Amsterdam Power Exchange, Dutch power exchange.
Bafa: Bundesamt für Wirtschaft und Ausfuhrkontrolle.
Biomass: Also known as biomass fuel. A term for all combustible
organic materials, including straw, wood chips and
wood pellets. CO emissions produced by the combustion
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of biomass are not covered by ETS. Biomass can be used in
both central power stations and small-scale CHP plants.
Cash-flow-at-risk (Cfar): Indicator that reflects the
maximum amount by which cash flow may fall, with a probability
of 95%, compared with expected cash flow over the
risk management time frame.
Central power station: A larger power station, typically
with a net installed power capacity of more than 100 MW.
CHp plant: A Combined Heat and Power (CHP) plant generates
both heat and electricity in the same process. The
heat generated may be used for industrial purposes and/or
district heating.
CHp plant, small-scale: A Combined Heat and Power
Plant (CHP), typically with a net installed power capacity of
less than 100 MW.
Climate partnerships: The possibility of providing customers
with energy-saving solutions. Including the possibility
of offering residential customers energy-saving Cleantech
solutions and advice, typically in the form of geothermal
heating, window insulation, etc. The possibility of offering
business customers actual partnerships by providing energy-saving
advice, with the energy savings achieved typically
being used to buy green electricity (from wind turbines)
from DONG Energy. Partnerships with business
customers open up other opportunities for collaboration
between energy company and customer in the longer term.
CO 2 : Carbon dioxide.
CO allowances: Carbon dioxide emissions allowances
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subject to the European Union Emissions Trading Scheme
(EU ETS).
Derivatives: Financial and physical instruments that can
be used to guarantee a specific price for the purchase or
sale of, for example, commodities and currency.
DK1 and DK2: Area prices for electricity in West Denmark
(DK1) and East Denmark (DK2).
DuC: Dansk Undergrunds Consortium.
EEX: European Energy Exchange, German power exchange.
EfEt: European Federation of Energy Traders. Develops
European standard contract documentation that can be
used for mutual trading in energy.
Emir: European Market Infrastructure Regulation. Its purpose
is to improve transparency and enhance market
safety and regulatory oversight.
Ets: The EU Emissions Trading Scheme, which aims to reduce
emissions of carbon dioxide and combat climate
change by means of a system that grants CO emissions
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allowances and enables electricity producers and other
emitters to trade these CO emissions allowances.
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Eua: European Union Allowance. The allowances available
within the EU borders.
Exploration and appraisal wells: Wells drilled to discover
and evaluate gas or oil in an unproved area to find new reserves
in an area in which hydrocarbon discoveries have
previously been made or to delineate a known accumulation.
fifO principle – coal inventories: First in, first out. DONG
Energy buys physical coal up to one year ahead of delivery.
To ensure security of supply, the inventory of coal typically
corresponds to 4 to 6 months’ consumption. As the value
of coal inventories is recognised in the balance sheet using
the FIFO principle, coal purchased in a period with high
market prices, followed by a period with declining coal
prices, will be recognised as a cost of sales item at prices
exceeding the current market price level.
fossil fuels: Fuel resources such as coal, coal products,
gas, crude oil and other hydrocarbon products.
ftE: Full Time Equivalent. The number of full-time employees
during a fixed time period. An FTE of 1.0 indicates that
the person is equivalent to a full-time worker, while an FTE
of 0.5 indicates that the person works part time only.
Green dark spread (GDs) and contribution margin from
electricity generation: Green dark spread represents the
contribution margin per MWh of electricity generated at a
coal-fired power station of a given efficiency. It is calculated
as the difference between the market price of electricity
and the cost of the coal (including associated freight
costs) and CO allowances used to generate the electricity.
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DONG Energy’s contribution margin from electricity generation
is affected, among other things, by whether electricity
is generated at times during the 24-hour cycle when
prices are relatively high (peak) or at times when prices are
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