F

Final Bill
The final supply invoice provided by a supplier at the end of a contract period.

Financial Gas Contract
Some financial contracts contemplate physical delivery of gas, like NYMEX gas contracts, but the primary purpose is to manage price risk rather than deliver or receive gas.

Firm
A supply including higher transportation costs which the National Grid cannot shut off at times of high demand. See Interupptable.

FiT
A government scheme to incentivise renewables micro-generation with guaranteed long-term payments for qualifying generated power. Funded by consumers through suppliers.

Fixed Charge
A daily, monthly or quarterly charge levied by the supplier and is in addition to the standing charge.

Fixed Price Contract
A fully-inclusive electricity supply contract, agreed in advance and paid monthly or quarterly with no periodic reconciliation.

Fixed Term Contract
Supply contract for a fixed price, over a fixed period of time, which gives customers a constant price. Fixed Charges include Standing Charges and Availability Charges.

Fixed-for-floating
A hedging arrangement in which the user is given a fixed price for a period of time in return for passing the price swings of the market onto another party.

Floor
A swap transaction in which a seller seeks to set a minimum fixed price. This can also be done through futures and options.

Flow
The data files used within the electricity industry to transfer data between suppliers, MOPs and data agents.

Flue gas desulphurisation (FGD)
A process for removing Sulphur Dioxide from power stations' flue gases.

Force Majeure
Unexpected and disruptive event beyond the control of buyer or seller that interferes with a party's ability to perform under a contract. A force majeure event will typically relieve a party from a contractual obligation.

Forward Curve
A forward view of the value of the future contracts as at a particular date - not an expectation of what prices will be at that time.

Forward Market
An informal market which trades in the future delivery of a specific type of oil with only some transactions resulting in physical delivery. Unlike a futures market, regulation is much less strict and there is no clearing-house or margin payments. These conditions tend to restrict trading to large oil companies and financial entities.

Forwards contract
An agreement to buy energy at a specified time and price in the future, money changes hands on the delivery date.

Fossil Fuel
An energy source formed in the Earth's crust from decayed organic material. Common fossil fuels are petroleum, coal, and natural gas.

Free on board (FOB)
Free on board, the price of a commodity purchased at the loading port.

Front Month
The futures contract closest to maturity. The nearby delivery month.

Front Season
The current season, summer or winter.

Fuel Cells
A fuel cell is a device that converts the chemical energy from a fuel into electricity through a chemical reaction with oxygen or another oxidizing agent. Hydrogen is the most common fuel (giving water as the only emission), but hydrocarbons such as natural gas and alcohols like methanol are sometimes used. Potential applications include stationary power generation, transport (replacing the internal combustion engine) and portable power (replacing batteries in mobile phones).

Fuel Mix Disclosure (FMD)
The FMD regulations oblige all suppliers to calculate and publish the fuel source and emissions intensity of all the electricity they supply. This includes electricity generated by the supplier and electricity bought from other generators, either through contracts or in the marketplace.

Fuel Poverty
A condition suffered by households which spend 10% of their income on energy to maintain warmth and comfort levels.

Fuel Standardised Energy Savings
These are energy savings that have been adjusted according to the carbon concentration of each fuel. These coefficients are set out in the EEC Order and are as follows: coal 0.56, electricity 0.80, gas 0.35, LPG 0.43 and oil 0.46

Futures
Used to designate all contracts covering the purchase and sale of financial instruments or physical commodities for future delivery on a commodity futures exchange.

Futures contract
Similar to a forwards contract normally traded through an exchange on standard contract terms - profits or losses are calculated and paid daily.

Futures Market
A formal exchange that trades contracts for delivery of a specific type of oil in future months. Only a very small volume results in actual delivery, and in some markets there is only cash settlement. The presence of a clearinghouse and regular daily margin payments on all positions ensures the financial integrity of the operation at all times. The market is open to all participants.