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Annex 6: Glossary of Terms

Next, definitions are given to different terms and concepts used in the text:

TermDefinitionSection where it appears in the guide
Open accessCapacity of a third party to make use of transportation facilities, in order to supply electricity to the system’s customers.Section Access to the transmission
Common area of influenceArea set for the remuneration of the trunk system, constituted by the minimum set of trunk facilities between two nodes of said system, in which concurrently, the following characteristics concur:

1. That between said nodes is added at least seventy-five percent of the total energy injection of the system;

2. That between said nodes is added at least seventy-five percent of the total demand of the system, and

3. That the density of use, given by the ratio of the percentage of injections within the common area of ​​influence to the total injections of the system and the percentage of the investment value of the facilities of the common area of ​​influence with respect to the value of investment of the total installations of the trunk system, is maximum.


Note: With the new Transmission Law of 2016 (Law 20936) this concept will no longer be used, given the new definitions of the transmission segments and the new form of remuneration will not be necessary.

Section 6.3.1 Payment of charges for use of the National Transmission System
Energy balanceDifference between injections (energy generated valued at marginal cost in injection bars to the transmission system) and withdrawals (energy committed in contracts valued at marginal cost in sales bars).Section Commercial Balance of a NCRE Generator
Regulating capacityIt is understood as the capacity of regulation of a hydroelectric plant, the period in which it can sustainably deliver maximum power using the dam or associated regulation pond and taking into account the expected tributaries.Section 3.5.1 Adequacy Power

Annex 3: Adequacy Power

Economic Load Dispatch Centers (CDECs)Former name of the Independent Coordinator of the Electric System Coordinator (See definition of Coordinator)
Free customerConsumers whose connected power is more than 5 MW and optionally (if the consumer prefers) when it exceeds 500 kW. There may be more than one type of free customer. These consumers have the option of accessing freely agreed prices. It is related to customer in wholesale market.Section 2.3.2 Free Customer
Regulated customer Consumers of a connected power equal to or less than 5 MW, with the possibility of those of power between 500 kW and 5 MW, and that are located in the concession area of a distribution company, to choose to be free customers.Section 2.3.1 Regulated Customer
Bilateral agreementDirect contract only between the generator of energy and the consumer or broker, carried out outside the centralized generator parkSection 6.2 Marketing alternatives
CoordinatorAn independent organization funded by all consumers, that does not own installations and has the responsibility to coordinate the system to operate safely and economically.Section 2.6.2 The Independent Coordinator of of the Electrical System Coordinator.

Mentioned in multiple sections throughout the Book.

Marginal costThe cost to the system of providing an additional (marginal) unit of energy, not considering sunk costs.Section 3.3 The spot market
Economic dispatchDistribution of all the generation requirements between the units of the generation park in order to reach the economic optimum of the system. It takes into account both the incremental costs of generation and the incremental costs of transmission.Section 3.3 The spot market


Section Dispatch and NCRE

Distribution CompanyIt corresponds to the companies with concession in a determined geographical area. They operate and maintain distribution facilities.Section 2.3.1 Regulated Customer


Section 3.6 Netbilling Law

Efficient company/modelIt corresponds to the optimal design (technical/ economic/organizational) of a distribution company, which defines the distribution service costs that are transferred to customers.Section 2.3.1 Regulated Customer
Distributed generationSource of electricity generation, connected directly to the distribution system or in the user’s indoor installations.Section 3.6 Netbilling Law


Section 5.2.1Procedure for connecting projects under the Netbilling Law


Annex 4: Self-supply energy projects integrated into the distribution network

Rate incomeIncome obtained by the line based on marginal costs. It is defined as the difference of the products of the flows by the marginal costs at both ends of the line.Section Remuneration of the transmission
ISOThe ISO in the Chile context corresponds to the model where the system is operated and coordinated by an agent independent of generators and other market participants. It differs from the traditional pool model, because in the latter it is the generators or their representatives that control the operation of the system.Section 3.2 Model of the electricity market
Non-Conventional Generator (MGNC)Generators whose source is unconventional and its surplus power supplied to the system are less than 20,000 kW. Considering efficient cogeneration based on fossil fuels, this category may also include projects classified as conventional energies.Section 4.3 Definition of means of NCRE generation 


Section 6.4 Exemption of charges

Wholesale marketPurchase and sale of electricity from large consumers to generators, along with the ancillary services required to maintain reliability and product quality at the transmission level.Section 3.2 Model of the electricity market


Section 6.2 Marketing alternatives

Spot marketMarket for immediate exchange of electricity at an instant marginal cost. In the case of Chile, it is closed to generators.Section 3.3 The spot market


Section 6.1.1 Marketing of the spot market

O&MIt refers to the costs associated with operation and maintenance applicable to generation plants or transmission facilities.Section 6.2 Marketing alternatives
Order of MeritOrdering from lowest to highest generation units according to their variable operating costs. In this way a first approximation of the economic dispatch of the plants for different levels of demand is obtained.Section 3.2 Model of the electricity market
Peak load pricingTariff system based on the marginalist theory where consumers pay a price per energy and a price per capacity (power) associated with the hours of greatest demand.Section 3.1 Economic fundamentals of the electricity market
ChargeCharge for use of transportation facilities.Section Remuneration of the transmission


Section 6.3 Payment for use of the networks

Small Generator (PMG)Generators whose surplus power available to the system is less than or equal to 9,000 kW connected to installations belonging to a trunk, subtransmission or additional system, hereinafter small generator or “PMG”.Section 4.3 Definition of means of NCRE generation 
Small Distributed Generator (PMGD)Generators whose surplus power is less than or equal to 9,000 kW, connected to the facilities of a distribution concessionaire, or to installations of a company that owns electricity distribution lines that use national assets for public use, hereinafter distributed generator or “PMGD”. PMGDs are given the right to connect to distribution networks.Section 4.3 Definition of means of NCRE generation 

Section 5.2.2 Connection to distribution networks of PMGD

Annex 4: Self-supply energy projects integrated into the distribution network

Plan of worksThe work plan corresponds to a node-pricing instrument, since its definition together with the optimization of the system operation (minimum expected operating cost and system failure) determine the expected marginal costs in the system. The indicative works plan is a reference for the adapted development of the system.Section 3.3 The spot market
Development polesAreas that are territorially identifiable in the country, located in the regions where the National Electric System is located, where there are resources for the production of electricity from renewable energies, the use of which, using a single transmission system, is a matter of public interest. Be economically efficient for electricity supplySection 2.4.1 Transmission Systems
PoolShort-term electricity market where the sellers offer in the pool the prices and quantities of electricity, and the generators are dispatched to supply the demand. A pool covers the functions of a bag and a system operator. These functions can be performed by a single entity, or alternatively, can be differentiated.Section 3.2 Model of the electricity market


Section 3.3 The spot market

PowerRate at which electricity is produced, or consumed. Power is measured in watts (W), or more conveniently in kilowatts (kW) or megawatts (MW). One MW equals 103 kW or 106W.General concept
Adequacy PowerPower that can guarantee a generator under conditions demand maximum considering the availability of primary energy and the reliability of the generation unit.Section 3.5.1 Adequacy Power


Section 4.6 Recognition of adequacy power to NCRE plants


Section 6.1.2 Sale of power in the spot market


Annex 3 Adequacy Power

Energy node priceAverage energy price at which transfers between generators and distribution companys are made to supply regulated customers. This price is determined by the CNE for periods of 6 months.Section 2.3.1 Regulated Customer


Section 3.2 Model of the electricity market

Power node pricePrice that is recognized to generators for their contribution to the peak demand of the system. The price of power is estimated considering the investment cost of a gas turbine needed to supply at maximum demand conditions of the system.Section 3.2 Model of the electricity market


Section 6.2.1 Alternative 1: Sale of energy and power in the spot market

RegulatorIt determines the regulatory framework that sets the rules, dictates rules and resolves divergences. This entity, which may consist of one or more institutions of the state, is called the regulatory entity.General concept
Service securityResponsiveness of an electric system, or part of it, to support contingencies and minimize the loss of consumption, through backups and ancillary services.Section 3.5 Adequacy and safety of the electric system
Ancillary servicesTechnical resources present in the generation, transmission, distribution and non-price regulated installations that each electric system must count on to coordinate the operation of the system in the terms set out in Article 137.Section 3.5 Adequacy and safety of the electric system


Section 6.5 Ancillary Services and NCRE

TransportersRefers to companies that operate at specified voltage levels for transmission systems. They transport electricity from generation to consumption centers.General concept