> ## Documentation Index > Fetch the complete documentation index at: https://docs.trlyr.com/llms.txt > Use this file to discover all available pages before exploring further. # Glossary > Definitions of key terms used across the terralayr platform and documentation. | 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](/layrUserGuide/deep-dives/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](/layrUserGuide/deep-dives/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. |