- Nodal market
- ERCOT settles energy at thousands of individual grid nodes rather than one zonal price, so two projects twenty miles apart can earn very different revenue. Node selection is a first-order siting decision, not a detail.
- LMP (locational marginal price)
- The price of one more megawatt-hour at a specific node, equal to energy cost plus congestion plus losses. Every ERCOT revenue model, hedge and battery dispatch decision starts from an LMP forecast.
- Ancillary services
- Grid-reliability products bought separately from energy — reserves, regulation and inertia-adjacent services. For batteries, ancillary revenue often exceeds energy arbitrage revenue in the early years, then compresses as more storage enters.
- RRS (Responsive Reserve Service)
- ERCOT's fast-acting frequency reserve, historically the richest ancillary product for batteries and the reason the first wave of Texas BESS projects penciled. Its price has fallen sharply as storage capacity has grown.
- ERS (Emergency Response Service)
- ERCOT's paid, contracted demand-response program in which loads commit to drop when the grid is short. A revenue line for industrial sites and aggregators, procured in defined time periods rather than continuously.
- Congestion and CRRs
- When transmission is constrained, prices diverge across the grid. Congestion Revenue Rights are financial instruments that let a market participant hedge that spread between two settlement points.
- Interconnection queue
- The formal request line to connect a generator or storage project to the grid, with sequential feasibility, system-impact and facilities studies. Queues now hold far more capacity than will ever be built, and queue position often matters more than technology.
- Large load interconnection
- The parallel process for connecting a very large consumer — typically a data center, electrolyzer or crypto site — rather than a generator. Newer than generation interconnection and the subject of active rulemaking over curtailability and cost responsibility.
- PPA (power purchase agreement)
- A long-term contract to buy power at an agreed price, physically delivered. The financing instrument that makes most utility-scale projects bankable, because lenders underwrite the offtake, not the merchant price.
- VPPA (virtual PPA)
- A purely financial contract-for-differences settled against a hub price, paired with the environmental attributes. The buyer never takes delivery, which is why corporations in one state can contract a wind farm in another.
- Hedging and basis risk
- Locking in price with futures, swaps or fixed contracts — and the residual exposure when the hedge settles at a hub while the asset settles at a node. Basis risk has bankrupted otherwise-sound Texas renewable projects.
- Capacity factor
- Actual annual output divided by output at full nameplate all year. Roughly 20-30% for solar and 35-50% for good wind sites, versus 90%+ for nuclear — the single number that separates nameplate marketing from real energy.
- LCOE (levelized cost of energy)
- Lifetime cost divided by lifetime output, the standard cross-technology comparison. Useful and routinely abused: LCOE ignores when the energy arrives, which is exactly what matters on a grid with a lot of solar.
- Curtailment
- Deliberately reducing output when the grid cannot absorb it or prices go negative. Curtailment risk is priced into every West Texas renewable model and is a core argument for co-located storage.
- Dispatchable vs intermittent
- Dispatchable resources produce on command (gas, nuclear, hydro, storage within its duration); intermittent ones produce when the weather allows. Nearly every grid policy fight reduces to who pays for the dispatchable capacity that backstops the intermittent fleet.
- Duck curve
- The net-load shape created by heavy midday solar — a deep belly at noon and a steep evening ramp as the sun sets into peak demand. It is the reason four-hour batteries and fast-ramping gas are valuable.
- Demand response
- Paying consumers to reduce or shift load instead of paying generators to produce more. The cheapest capacity on any grid, limited mainly by enrollment, telemetry and the willingness of customers to be interrupted.
- Virtual power plant (VPP)
- A fleet of distributed resources — home batteries, thermostats, EV chargers, backup generators — aggregated and dispatched as if it were one plant. Regulatory qualification, not technology, is usually the hard part.
- BESS (battery energy storage system)
- Grid-connected battery installations, overwhelmingly lithium iron phosphate at utility scale today. Sold on power rating (MW) and energy capacity (MWh) together — quoting one without the other tells you nothing.
- Four-hour battery
- The de facto standard duration, meaning the system can deliver its full rated power for four hours. It matches the evening net-load peak on most grids and anchors capacity-accreditation rules.
- Round-trip efficiency
- Energy out divided by energy in over a full charge-discharge cycle, typically 85-92% for lithium systems including auxiliaries. The losses are a direct haircut on arbitrage margin.
- Degradation and augmentation
- Batteries lose usable capacity with cycling and calendar age, so contracts specify a guaranteed capacity curve and owners plan augmentation — adding modules later to hold nameplate. Ignoring augmentation capex understates lifetime cost.
- Resource adequacy
- Whether the fleet can meet peak demand with acceptable risk. ERCOT has no capacity market, so adequacy is signaled through scarcity prices and reliability standards rather than paid for directly — the structural argument that has run since Winter Storm Uri.
- Winterization (post-Uri)
- Weatherization requirements imposed on generators and, more slowly, on gas supply after the February 2021 freeze. Inspections, declarations and penalties now apply, and the gas-electric interdependency remains the known weak link.
- Data-center load growth
- Large computing loads arriving faster than generation or transmission can be built, reversing two decades of flat US electricity demand. It has reopened debates about nuclear, gas, cost allocation and who is allowed to be curtailed.
- Transmission buildout and CREZ
- Texas's Competitive Renewable Energy Zones built roughly 3,600 miles of high-voltage line to move West Texas wind east — the state's proof that transmission-first planning works, and the model invoked in every current expansion argument.
- Net metering (NEM)
- Compensating rooftop solar exports at or near retail rates. Texas has no statewide net-metering mandate — buyback is a competitive plan feature from retail providers and municipal utilities, which changes rooftop economics completely versus California or Arizona.
- ITC and PTC
- The investment tax credit takes a percentage of project cost up front; the production tax credit pays per megawatt-hour generated over ten years. Solar and storage projects now choose between them, and the choice moves the model by double digits.
- Transferability
- The ability to sell federal energy tax credits for cash to an unrelated taxpayer, introduced by the Inflation Reduction Act. It opened project finance well beyond the small pool of traditional tax-equity banks and created an active credit-trading market.
- 45X advanced manufacturing credit
- A per-unit production credit for domestically manufactured solar, wind, battery and inverter components. It is the main reason US cell, module and battery factories were announced at scale, and its durability is the main risk those factories carry.
- Domestic content bonus
- An extra credit percentage for projects meeting US-made steel, iron and manufactured-product thresholds. Qualifying requires supplier cost data most vendors are reluctant to hand over, making it a live procurement issue.
- RIN and RVO
- Renewable Identification Numbers and Renewable Volume Obligations under the federal Renewable Fuel Standard — the tradable-credit system that governs biofuel blending and is a real P&L item for refiners and blenders.
- Upstream, midstream, downstream
- The three segments of oil and gas: finding and producing it, moving and processing it, and refining and selling it. Companies, contracts, regulators and buying behavior differ so completely between them that generic 'oil and gas' content lands nowhere.
- Working interest vs royalty interest
- A working interest pays a share of drilling and operating costs and receives a share of revenue; a royalty interest receives revenue free of those costs. The distinction drives taxation, liability and the entire mineral-buying market.
- Mineral rights
- Ownership of the subsurface, severable from the surface estate — a distinctly American arrangement and the reason a Texas landowner can lease to an operator at all. Leases, bonuses and royalty percentages all flow from it.
- Decline curve
- The characteristic production falloff of a well, extremely steep in shale — often 60-70% in year one. It is why shale requires continuous drilling to hold production flat and why 'maintenance capex' means something different here.
- EUR (estimated ultimate recovery)
- Total hydrocarbons a well is expected to produce over its life, derived by fitting and extrapolating the decline curve. Every acreage valuation and type curve rests on it, and small assumption changes swing it enormously.
- Frac spread
- A complete hydraulic-fracturing crew and equipment set. The frac spread count is the industry's most-watched real-time activity indicator, faster and more honest than the rig count because completions follow drilling.
- DUC wells
- Drilled but uncompleted wells — inventory that has been drilled and left waiting on a frac crew or better prices. The DUC count is a stored-supply signal that can add production without any new drilling.
- Flaring and methane intensity
- Burning associated gas that cannot be captured, and the broader measure of methane emitted per unit produced. Now measured by satellite and aerial survey rather than self-reported estimates, which turned it into a financing and market-access issue.
- NGL (natural gas liquids)
- Ethane, propane, butanes and natural gasoline separated from raw gas at processing plants. NGL prices frequently determine whether a 'gas' well is actually economic, and drive the fractionation and petrochemical midstream.
- Take-or-pay
- A contract obligating the buyer to pay for a minimum volume whether or not it is taken. Standard in pipeline, processing and LNG deals — it is what makes multi-billion-dollar midstream infrastructure financeable.
- FID (final investment decision)
- The board-level commitment that turns a development project into a construction project and releases the capital. Before FID nothing is real; project announcements that never reach FID are the industry's most common overstatement.
- EPC and O&M
- Engineering, procurement and construction delivers the asset, usually under a fixed-price wrap with performance guarantees; operations and maintenance keeps it running for twenty-plus years. Two entirely different sales motions and margin profiles, frequently sold by the same firm.