Glossary - terralayr

Term	Definition
1P assets	First-party assets — BESS assets that terralayr owns.
3P assets	Third-party assets — BESS assets that terralayr aggregates to the virtual battery architecture without owning or developing them.
50Hertz	One of Germany’s TSOs.
aFRR	Automatic Frequency Response Service. A secondary ancillary reserve activated automatically after 30 seconds of FCR operations to restore system balance.
AED	Available Energy Discharge. A daily usage metric for virtual assets that accounts for availability. See Cycling calculations.
aFR(R)	Automatic Frequency Restoration Reserve.
Amprion	One of Germany’s TSOs.
Ancillary Services (AS)	Systems for providing stability to the grid, maintaining grid frequency by balancing short-term supply and demand. It is split into subservices like FCR and aFRR.
Annual baseload PPA	A contract structure where the buyer commits to purchasing a fixed volume of energy every hour over a year. Profile and volume risks sit with the seller.
Balancing risk	The risk arising from deviations between scheduled and actual production, which may result in imbalance costs charged by the system operator.
Bids (Ancillary)	Ancillary Services are a collection of ‘markets’ in which providers can make bids, making offers on provisions like short-term capacity.
Bids (Virtual Asset)	Virtual Asset access can be provided by way of auction, wherein organisations make bids.
Block	A digital representation of a chunk of asset capacity. Blocks are short-lived and participate in only one market (wholesale, aFRR POS, aFRR NEG, or FCR).
Buyer / offtaker	The entity purchasing power from a renewables generator in a PPA deal. Also known as consumer or purchaser.
Cannibalization risk	The risk of falling renewable revenues due to reduced prices following high market penetration of renewable assets.
Capture factor	The ratio of a plant’s volume-weighted average price to the baseload price. Indicates how much above or below the baseload price the plant’s captured price is expected to be.
COD	Commercial Operation Date — the date a project can start selling its output.
Contracted volumes	Renewable production volumes committed for delivery within a PPA agreement. A buyer may contract 100% of output or a portion (e.g. 50%).
CfD	Contract for Difference. A financial instrument where two parties exchange cashflows based on a strike price and a reference market price. Used as both a government support mechanism and in bilateral PPAs.
Corporate	A non-utility, non-trader consumer of electricity.
Cycling	The process of fully discharging a battery. If a brand-new battery is charged to 50%, then discharges to 0%, it has complete 0.5 cycles.
Cycling Limit	The maximum number of cycles that a battery is covered by warranty for.
DA	Day-Ahead. The forward electricity market where participants buy and sell power one day before delivery.
Degradation	The rate at which a solar or battery asset’s output declines over time.
DER	Distributed Energy Resources.
Disaggregation	The process of distributing virtual asset schedules across physical assets.
DSO	Distribution System Operator.
EFA	Energy Forwarding Agreement, the standardisation of wholesale (and aFRR Capacity) trading into six 4 hour blocks for each day.
EEX	An official body that polices energy trading. Terralayr must keep them notified of goings ons in order to ensure transparency.
Energie Koppler (Ek/EK)	One kind of swarmbox used by Terralayr batteries.
Energy Yield Assessment	A technical assessment of the expected annual energy yield of a planned power plant, carried out by an engineering firm. Plays a key role in determining the volume a plant can commit to selling.
EIC code	A unique identifier for a party’s balancing group within the EU energy market. Required for wholesale market settlement on Layr.
ESG	Environmental, Social, and Governance. Non-financial factors used to assess a company’s sustainability and societal impact.
Exposure	The volume of a plant’s output that is not covered by fixed-price instruments and therefore exposed to wholesale market price volatility. Also known as merchant exposure or revenue risk.
FCR	Frequency Containment Reserve. A primary ancillary reserve that responds automatically within seconds to frequency deviations.
Feed-in tariff (FIT)	A fixed subsidy paid for electricity from renewable sources fed into the grid.
FFR	Frequency Response Reserve. A type of ancillary service used to maintain grid stability.
Financial PPA / Virtual PPA	A PPA treated as a financial instrument with no physical electricity delivery. Common in the US; less common in Europe due to accounting treatment differences.
Forecast inaccuracy	The difference between day-ahead forecasted production and actual realised production of a plant.
Frozen energy	The portion of a virtual asset’s SoE that is isolated in the unavailable share during an unavailability. It is preserved and returned when the unavailability ends.
Gate closure	The deadline after which no further schedule updates are accepted for a given delivery period. Typically 5 min 30 s before delivery on Layr.
GoO / GO	Guarantee of Origin. An instrument that certifies electricity was generated from renewable sources and allows the “green benefit” to be transferred from seller to buyer.
Hedge ratio	The percentage of an open position that has been hedged.
Hedging	A risk management strategy that takes an offsetting position to reduce price uncertainty.
HVAC	Heating, Ventilation, and Air Conditioning. Relevant to battery temperature management.
IDC	Intraday Continuous markets. Real-time electricity markets allowing continuous trading throughout the day.
IPP	Independent Power Producer.
LCOE	Levelized Cost of Energy. The average net present cost of electricity production for a generating plant over its lifetime.
Legal risk	The risk of a change in law or regulation that alters the balance of revenue or obligations between PPA counterparties (e.g. a retroactive tax change).
Liquidity	The availability of buyers and sellers in an energy market at reasonable prices and transaction costs. Poor liquidity means a party may be unable to transact at the desired price or volume.
Liquidity Shortfall	The risk that the non-contracted volume of a plant has a negative value due to unfavourable weather conditions (volume shortfall) or unfavourable spot price distributions.
M2M	Many-to-Many, the relationship between virtual assets and physical assets.
Market access PPA	A contract for the sale of electricity at market prices. Covers services such as forecasting, imbalance management, and wholesale trading. Does not provide fixed revenue.
Mark to market (MtM)	The net present value of a position under current market prices relative to prices at the time of contracting. Used to assess the current value of a position and the cost to unwind it.
Merchant power plant	A renewable energy plant exposed to wholesale market prices with no publicly guaranteed long-term revenue.
mFRR	Manual Frequency Response Service. A tertiary reserve activated manually by grid operators after 5 minutes of aFRR operations.
Monte Carlo simulation	A mathematical technique using random number generation to model risk and uncertainty. Used in energy for revenue risk assessments.
Monthly Baseload PPA	A contract structure where the buyer commits to purchasing a fixed volume of energy for every hour of each month, accounting for seasonal production variability.
Monthly Profile Cost/Gain	The difference between the value of a monthly production profile (volume-weighted average of monthly prices) and an annual baseload profile. Whether it is a cost or gain depends on the correlation between monthly volumes and monthly prices.
OEM	Original Equipment Manufacturer.
P-values (P50, P90, P10)	Probability percentiles used to express the likelihood that actual production or revenue will exceed a given value. P50 = 50% probability of exceeding; P90 = 90% probability (more conservative).
Pay-as-produced (PAP)	A PPA volume structure where the offtaker buys all energy produced at any time.
PCG	Parent Company Guarantee. A form of credit support where an investment-grade parent company guarantees a counterparty’s contractual obligations — commonly required by lenders or where a counterparty has a low credit rating.
Peak load PPA	A PPA structure where the agreement covers only peak consumption hours (e.g. Monday–Friday, 08:00–20:00). Less common than baseload or PAP structures.
Physical PPA	A PPA with physical electricity delivery, where asset and offtaker are in the same grid network.
PPA	Power Purchase Agreement. A contractual agreement between an energy buyer and seller to buy and sell energy from a renewable asset.
Price risk	The uncertainty around the price at which energy will be bought or sold, arising from wholesale market volatility. Can be mitigated through hedging instruments such as PPAs or futures contracts.
Price zone	A geographic pricing area within a country’s electricity market, where prices are set by local supply, demand, and grid interconnection constraints (e.g. Nordic markets, Italy).
Profile risk	The risk that the hourly production profile of a generating asset leads to a lower average captured price than a baseload reference.
Ramp rate	The speed at which a battery can increase or decrease its power output. See Ramp rates.
Ramping	The act of accelerating/decelerating the charge/discharge speed in compliance with ramp rates.
Regulatory risk	The risk that a regulatory change adversely affects a project’s business model or revenues (e.g. retroactive cuts to feed-in tariffs or changes in transmission loss liability).
Replacement cost	The cost incurred by a seller who must replace a PPA’s fixed price if the counterparty defaults — determined by the difference between the contracted price and prevailing market prices at the time of default.
Revenue Distribution Curve	A curve representing simulated revenues across a set of scenarios accounting for volume, price, and profile deviations. A narrower curve indicates more certain outcomes; a higher curve indicates more scenarios clustered at that revenue level.
RtB	Ready-to-Build. The development stage at which a BESS project has obtained all permits, grid approvals, financing, and EPC agreements needed to commence construction without further regulatory or technical delays.
RTE	Round-Trip Efficiency. The ratio of energy output to energy input over a full charge/discharge cycle.
Seller	The legal entity responsible for the sale of energy from a renewables project — typically the project SPV, a generator, or a utility acting as intermediary. Also called generator, producer, or supplier.
Settlement location	In a financial PPA or CfD, the location (node or trading hub) where electricity is sold to the wholesale market. Particularly relevant for cross-border PPAs where production and consumption are in different countries.
Settlement period	The 15-minute delivery interval used for wholesale trading on Layr.
Settlement risk	The risk that a counterparty fails to pay for delivered energy. Also known as invoicing risk.
SoC	State of Charge. The current charge level of a battery as a percentage of its energy capacity.
SoE	State of Energy. The current stored energy in a battery in kWh.
Stack-and-roll	A hedging strategy where a producer’s total exposure is aggregated and hedged using short-term futures contracts, which are rolled over into new contracts as they expire. Involves rollover costs and residual price risk (contango/backwardation).
Swarmbox	Device that the Layr interfaces with to manage real-world batteries.
System Price	The spot market electricity price at the end of each settlement period, typically determined by supply, demand, and imbalance costs. Forward system prices are commonly used as a reference but are an imperfect hedge for renewable producers remunerated in local area prices.
TenneT	One of Germany’s TSOs.
Tenor	The duration of a PPA contract from start to end date. Also known as the delivery period.
TMH	The Mobility House, a merchant client.
Tolling	Charging a customer a long-term, and consistent, ‘rent’ on a virtual asset. Useful as a source of predictable revenue, though typically less profitable.
TransnetBW	One of Germany’s TSOs.
TSO	Transmission System Operator.
Virtual asset (vA/VA) / Virtual battery (vB/vbat)	A time-limited, standardised representation of physical BESS capacity composed of blocks. Users interact with virtual assets instead of directly with physical hardware.
vBA	Virtual Battery Auction. A competitive pay-as-bid auction where participants compete for access to virtual batteries.
VET	Vattenfall Energy Trading, a tolling client.
Volume risk	The uncertainty in achieving expected production volumes due to weather variability. Distinct from profile risk, which covers hourly distribution.
Wholesale block	The portion of a virtual asset’s power capacity available for wholesale trading after deducting ancillary service commitments.