Internet of Energy – Key Vocabulary

Vocabulary flashcards summarizing key terms and definitions from the Internet of Energy lecture series, covering energy basics, system analysis, market modeling, investment economics, and environmental policy.

Joule (J)

The SI unit of energy; equal to the work done when a force of one newton moves an object one meter.

Watt (W)

The SI unit of power; one joule of energy transferred per second.

Kilowatt-hour (kWh)

A common unit of energy equal to 1,000 watts supplied or consumed for one hour (3.6 MJ).

Mechanical Energy

Energy capable of performing mechanical work, such as moving or lifting objects.

Chemical Energy

Energy stored in molecular bonds and released through chemical reactions, e.g., combustion of fuel.

Electrical Energy

Energy associated with electric currents and electromagnetic fields, easily convertible to other forms.

Thermal Energy

Internal kinetic energy of atoms and molecules, perceived as heat.

Radiant Energy

Energy carried by electromagnetic waves, including visible light and radio waves.

Nuclear Energy

Energy stored in atomic nuclei, released by fission or fusion reactions.

Primary Energy

Energy content of resources in their natural state before any human-made conversion (e.g., coal, sunlight).

Gross Energy (TPES)

Domestic production plus imports minus exports of energy; often used interchangeably with primary energy.

Final Energy

Energy that reaches the point of consumption after conversion and transport losses (e.g., electricity at the socket).

Useful Energy

Portion of final energy actually delivering the desired benefit, such as light from a bulb or heat from a heater.

Energy Balance

A comprehensive accounting framework that records a country’s energy flows from supply to end use, ensuring conservation of energy.

Energy Conversion

Process of transforming one form of energy into another, governed by the first law of thermodynamics.

Efficiency (η)

Ratio of desired energy output to energy input in a conversion process, expressed as a percentage.

Orders of Magnitude Prefixes

Prefixes like kilo (10³), mega (10⁶), and giga (10⁹) used to express large or small energy quantities.

Load Duration Curve

A graph that orders power demand from highest to lowest over a period, showing required capacity levels.

Full Load Hours

Number of hours a plant would have to run at full capacity to produce its annual energy output.

Merit Order

Ranking of power plants by ascending marginal cost to determine dispatch and market clearing price.

Marginal Cost

Cost of producing one additional unit of output; for power plants primarily fuel, CO₂, and variable O&M costs.

Contribution Margin

Difference between market price and average variable cost, used to cover fixed costs and profit.

Break-even Point

Operating point where contribution margin equals average fixed cost; total profit is zero.

Production Threshold

Price level at which contribution margin becomes zero; below this, shutting down is rational in the short run.

Levelized Cost of Electricity (LCOE)

Average cost per MWh of generating electricity over a plant’s lifetime, including capital, O&M, and fuel costs.

Present Value Factor (PVF)

Multiplier that converts a series of equal future cash flows into their present value at a given discount rate.

Net Present Value (NPV)

Sum of discounted cash flows minus initial investment; positive NPV indicates a profitable project.

Bottom-Up Modeling

Demand modeling approach using detailed micro-data on individual devices or consumers to build system totals.

Top-Down Modeling

Approach that starts with aggregated macro-data and disaggregates it to sectors, regions, or time slices.

Sectoral Disaggregation

Breaking down aggregate energy data into sectors (industry, transport, households) for detailed analysis.

Energy Atlas

Virtual tool that visualizes spatial energy data, often used for scenario analysis or planning.

Emission Factor

Amount of CO₂ (or other gas) released per unit of energy or fuel consumed, e.g., t CO₂/MWh_th.

Externalities

Positive or negative impacts of an economic activity on uninvolved third parties without compensation.

External Costs

Monetary valuation of negative externalities, such as health damages or climate impacts from energy use.

Coase Theorem

Principle stating that, with well-defined property rights and zero transaction costs, parties can bargain to an efficient outcome regardless of initial rights allocation.

Cap-and-Trade System

Market mechanism that sets a total emissions cap and allows trading of allowances to achieve least-cost reductions.

Emission Allowance

Tradable permit granting the holder the right to emit a specified amount of a pollutant (e.g., one ton of CO₂).

Substitution Principle (Energy Balance)

Method that assigns primary energy to renewables based on the efficiency of displaced conventional plants.

IEA Method (Fictive Efficiency)

Accounting approach that treats renewable electricity as having 100 % efficiency, equating primary and final energy.

Energy Service

Ultimate benefit obtained from energy use, such as mobility, illumination, or thermal comfort.

Demand Curve

Graph showing quantity demanded at different prices, typically downward sloping due to declining marginal utility.

Price Elasticity of Demand

Measure of how responsive quantity demanded is to price changes; tends to be low for energy in the short term.

Supply Curve

Graph showing quantity a producer is willing to supply at different prices, generally upward sloping.

Market Clearing Price (MCP)

Price at which aggregated supply equals aggregated demand in a market model.

Fundamental Market Model

Simulation that derives prices from physical supply-demand fundamentals (costs, capacities, demand) rather than statistical fitting.

Feed-in Tariff (FiT)

Guaranteed payment per kWh to renewable generators, ensuring investment profitability and encouraging deployment.

Feed-in Premium

Subsidy scheme where renewable producers receive a premium on top of the market price to reach a target revenue.

Joule (J)

The SI unit of energy; equal to the work done when a force of one newton moves an object one meter.

Watt (W)

The SI unit of power; one joule of energy transferred per second.

Kilowatt-hour (kWh)

A common unit of energy equal to 1,000 watts supplied or consumed for one hour (3.6 MJ).

Mechanical Energy

Energy capable of performing mechanical work, such as moving or lifting objects.

Chemical Energy

Energy stored in molecular bonds and released through chemical reactions, e.g., combustion of fuel.

Electrical Energy

Energy associated with electric currents and electromagnetic fields, easily convertible to other forms.

Thermal Energy

Internal kinetic energy of atoms and molecules, perceived as heat.

Radiant Energy

Energy carried by electromagnetic waves, including visible light and radio waves.

Nuclear Energy

Energy stored in atomic nuclei, released by fission or fusion reactions.

Primary Energy

Energy content of resources in their natural state before any human-made conversion (e.g., coal, sunlight).

Gross Energy (TPES)

Domestic production plus imports minus exports of energy; often used interchangeably with primary energy.

Final Energy

Energy that reaches the point of consumption after conversion and transport losses (e.g., electricity at the socket).

Useful Energy

Portion of final energy actually delivering the desired benefit, such as light from a bulb or heat from a heater.

Energy Balance

A comprehensive accounting framework that records a country’s energy flows from supply to end use, ensuring conservation of energy.

Energy Conversion

Process of transforming one form of energy into another, governed by the first law of thermodynamics.

Efficiency (η)

Ratio of desired energy output to energy input in a conversion process, expressed as a percentage.

Orders of Magnitude Prefixes

Prefixes like kilo (10^3), mega (10^6), and giga (10^9) used to express large or small energy quantities.

Load Duration Curve

A graph that orders power demand from highest to lowest over a period, showing required capacity levels.

Full Load Hours

Number of hours a plant would have to run at full capacity to produce its annual energy output.

Marginal Cost

Cost of producing one additional unit of output; for power plants primarily fuel, CO₂, and variable O&M costs.

Contribution Margin

Difference between market price and average variable cost, used to cover fixed costs and profit.

Break-even Point

Operating point where contribution margin equals average fixed cost; total profit is zero.

Production Threshold

Price level at which contribution margin becomes zero; below this, shutting down is rational in the short run.

Levelized Cost of Electricity (LCOE)

Average cost per MWh of generating electricity over a plant’s lifetime, including capital, O&M, and fuel costs.

Present Value Factor (PVF)

Multiplier that converts a series of equal future cash flows into their present value at a given discount rate.

Net Present Value (NPV)

Sum of discounted cash flows minus initial investment; positive NPV indicates a profitable project.

Bottom-Up Modeling

Demand modeling approach using detailed micro-data on individual devices or consumers to build system totals.

Top-Down Modeling

Approach that starts with aggregated macro-data and disaggregates it to sectors, regions, or time slices.

Sectoral Disaggregation

Breaking down aggregate energy data into sectors (industry, transport, households) for detailed analysis.

Energy Atlas

Virtual tool that visualizes spatial energy data, often used for scenario analysis or planning.

Emission Factor

Amount of CO₂ (or other gas) released per unit of energy or fuel consumed, e.g., t CO₂/MWh_th.

Externalities

Positive or negative impacts of an economic activity on uninvolved third parties without compensation.

External Costs

Monetary valuation of negative externalities, such as health damages or climate impacts from energy use.

Coase Theorem

Principle stating that, with well-defined property rights and zero transaction costs, parties can bargain to an efficient outcome regardless of initial rights allocation.

Cap-and-Trade System

Market mechanism that sets a total emissions cap and allows trading of allowances to achieve least-cost reductions.

Emission Allowance

Tradable permit granting the holder the right to emit a specified amount of a pollutant (e.g., one ton of CO₂).

Substitution Principle (Energy Balance)

Method that assigns primary energy to renewables based on the efficiency of displaced conventional plants.

IEA Method (Fictive Efficiency)

Accounting approach that treats renewable electricity as having 100 % efficiency, equating primary and final energy.

Energy Service

Ultimate benefit obtained from energy use, such as mobility, illumination, or thermal comfort.

Demand Curve

Graph showing quantity demanded at different prices, typically downward sloping due to declining marginal utility.

Price Elasticity of Demand

Measure of how responsive quantity demanded is to price changes; tends to be low for energy in the short term.

Supply Curve

Graph showing quantity a producer is willing to supply at different prices, generally upward sloping.

Market Clearing Price (MCP)

Price at which aggregated supply equals aggregated demand in a market model.

Fundamental Market Model

Simulation that derives prices from physical supply-demand fundamentals (costs, capacities, demand) rather than statistical fitting.

Feed-in Tariff (FiT)

Guaranteed payment per kWh to renewable generators, ensuring investment profitability and encouraging deployment.

Feed-in Premium

Subsidy scheme where renewable producers receive a premium on top of the market price to reach a target revenue.

First Law of Thermodynamics

States that energy cannot be created or destroyed, only transformed from one form to another; also known as the law of conservation of energy.

Second Law of Thermodynamics (Entropy Principle)

States that the total entropy of an isolated system can only increase over time, implying that energy conversions always result in some loss of useful energy (e.g., as heat).

Base Load Power Plant

Power plants designed to run continuously at or near full capacity to meet constant demand, typically characterized by low marginal costs (e.g., nuclear, large coal, hydro).

Peaker Plants

Power plants designed to operate only during periods of high demand, characterized by high marginal costs but quick start-up times (e.g., gas turbines, pumped hydro).