Important terminology that’s used in the electric utilities industry includes:

 Power – the rate at which energy is produced or consumed.

 Kilowatt (or kW) – a unit to quantify power. Higher units are megawatts (or
MW) and gigawatts (or GW)—equivalent to 1,000 kW and a million kW,
respectively.
 Kilowatt hour (or kWh) – a unit used to measure energy. Equipment uses up
to one kW if its used for an hour.
 Load – the amount of electricity delivered or required at any specific point of
time in the system.
 Load factor – the ratio between average load and maximum load in a
specified time frame.
 Capacity – the maximum output achievable from a power plant.
 Capacity factor – the ratio of the actual output to the potential output. It’s an
important metric to understand a plant’s efficiency.
 Utility – a company that provides essential services like water, electricity,
transportation, or communication to the public. It’s subject to government
regulation.
 Renewable energy – energy created from sources that can never be depleted.
The sources are generated by nature. Examples include solar, wind,
geothermal energy, and hydroelectric energy.
 Power purchase agreement (or PPA) – the contract between a power
producer and its customers. PPA’s lock the price of power at a specified price
for the life of the agreement.
 Plant Factor: the ratio of the average power load of a plant to its rated
capacity
 availability factor: The availability factor of a power plant is the amount of
time that it is able to produce electricity over a certain period, divided by the
amount of the time in the period.
 The utilization factor or use factor is the ratio of the time that a piece of
equipment is in use to the total time that it could be in use. It is often averaged
 over time in the definition such that the ratio becomes the amount of energy
used divided by the maximum possible to be used. These definitions are
equivalent.
 power factor of an AC electrical power system is defined as the ratio of the
real power absorbed by the load to the apparent power flowing in the circuit,
and is a dimensionless number in the closed interval of −1 to 1. A power factor
of less than one indicates the voltage and current are not in phase, reducing
the average product of the two. Real power is the instantaneous product of
voltage and current and represents the capacity of the electricity for
performing work. Apparent power is the product of RMS current and voltage.
Due to energy stored in the load and returned to the source, or due to a non-
linear load that distorts the wave shape of the current drawn from the source,
the apparent power may be greater than the real power. A negative power
factor occurs when the device (which is normally the load) generates power,
which then flows back towards the source.