> For the complete documentation index, see [llms.txt](https://renewables.docs.helinplatform.com/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://renewables.docs.helinplatform.com/sgm-product-docs/concepts/energy-concepts.md).
# Energy concepts
Plain-language reference for the grid, contract and battery terms used throughout the SGM documentation.
This page explains the energy and grid terms used throughout the SGM documentation in plain language. If you encounter a term in another page and want a clearer explanation, you'll find it here.
***
## Grid connection capacity
Your **grid connection** is the physical link between your site and the public electricity grid, and it has a maximum capacity, measured in kW or MW, for both importing power (consumption) and exporting power (production/feed-in).
This capacity is fixed by your grid operator and your network contract. SGM cannot change it; it can only manage your assets to ensure you stay within it.
***
## Unlimited vs limited grid connection
**Unlimited grid:** Your grid connection capacity is always larger than the maximum amount your site could ever produce or consume. Staying within limits is simply a matter of scaling assets down when needed, no energy storage required.
**Limited grid:** Your site's peak production or consumption can exceed your grid connection capacity. No matter how aggressively you curtail your controllable assets, there will be moments when the grid alone can't absorb or supply what the site needs. Solving this requires shifting energy across time using a battery, see [Load shifting](#load-shifting) below.
***
## Setpoint
A **setpoint** is the target output or input value you send to an asset, for example, "produce no more than 80 kW" or "charge at 50 kW." SGM translates your setpoints into hardware commands the asset understands.
Setpoints can be in kW (an absolute power value) or % (a percentage of the asset's maximum capacity). Dynamic Power Control only accepts kW setpoints because a percentage is meaningless when the target varies continuously.
***
## Peak shaving
**Peak shaving** is the practice of reducing an asset's output (or input) when it approaches a defined limit, and increasing it again when headroom opens up.
In SGM, the Global Setpoint Limiter performs passive peak shaving automatically, it watches your configured limits and adjusts asset setpoints up and down in real time to keep the site inside its boundaries.
Peak shaving works for unlimited grid sites. For limited grid sites, it is not sufficient on its own, even after shaving production or consumption to zero, the site may still breach its grid limit. That's where load shifting comes in.
***
## Load shifting
**Load shifting** means moving energy consumption or production to a different point in time, rather than simply curtailing it.
The most common implementation is battery-based:
* **Consumption load shifting (Power Assist):** During periods when consumption would exceed the grid limit, the battery discharges to supply the shortfall. During quiet periods, the battery recharges. Net effect: the grid connection never sees more than its limit, even though total consumption is higher.
* **Production load shifting (Protective mode):** During periods when PV production would exceed the grid feed-in limit, the battery absorbs the excess. During quiet periods, the battery discharges. Net effect: the grid never sees more feed-in than its limit allows, even though total production is higher.
Load shifting is distinct from curtailment, energy that would otherwise be lost (clipped) is instead stored and used later.
***
## Self-consumption
**Self-consumption** refers to the proportion of your site's generated energy (typically solar) that is used on site rather than exported to the grid.
High self-consumption is financially beneficial when the value of locally consumed energy (avoided import cost) exceeds the value of exported energy (feed-in tariff). Battery systems can increase self-consumption by storing excess solar generation during the day for use in the evening.
***
## SOC, State of Charge
**SOC** is the current charge level of a battery, expressed as a percentage of its total capacity. 100% SOC means fully charged; 0% SOC means fully discharged.
In SGM's BESS strategies, the SOC minimum and maximum thresholds define the operating window, the battery won't discharge below the minimum (preserving reserve for the next peak) and won't charge above the maximum (preserving room to absorb the next excess production period).
***
## CBC contract
**CBC** stands for **Capacity Billing Contract** (capaciteitscontract in Dutch). Under a CBC contract, the grid operator charges you based on your peak power demand or feed-in during a billing period, rather than purely on energy consumed or produced.
A CBC contract typically specifies a maximum power level (in kW) that you must not exceed. Exceeding it triggers additional charges. SGM can enforce a CBC limit dynamically using Dynamic Power Control or Site Control, ensuring your peak stays within the contracted cap.
***
## SDE subsidy
**SDE** stands for **Stimulering Duurzame Energieproductie**, the Dutch government subsidy scheme for renewable energy production. SDE subsidies are paid per kWh fed into the grid, up to a maximum annual production volume.
One key constraint: the amount of solar energy you feed into the grid cannot exceed the total capacity of the solar installation as registered with the subsidy. If your PV system feeds in more than this cap (for example, due to a site expansion), you risk losing subsidy eligibility.
SGM's SDE Feed-in Control strategy monitors and enforces this limit automatically.
***
## UCL, Uncontrolled Load
**UCL** refers to energy consumers on your site that SGM cannot directly control, for example, office equipment, HVAC systems, or production machinery. Their consumption is real and affects how much headroom you have on your grid connection, but SGM can only observe them (via a meter), not command them.
In dynamic control configurations, SGM accounts for UCL by reading the actual grid meter value and adjusting controlled assets accordingly, effectively compensating for the uncontrolled load without needing to control it directly.
***
## RTI, Real Time Interface
**RTI** is a Dutch grid operator communication protocol that allows system operators (like TenneT or regional DSOs) to send real-time curtailment commands to large distributed energy resources (DERs).
RTI is mandatory for newly installed DERs between 1 MWp and 50 MWp. It is a two-way protocol, the grid operator can both send setpoints and receive real-time status data from the DER.
SGM is a DNV-certified RTI endpoint. RTI commands received from the grid operator can be combined with site-specific SGM strategies, so regulatory requirements and your own operational objectives are managed simultaneously.
More information: [Netbeheer Nederland, RTI](https://www.netbeheernederland.nl)
***
## Day-ahead market (EPEX)
The **day-ahead market** is an electricity exchange where energy is bought and sold for delivery the following day, with prices set per hour. In the Netherlands, this is the EPEX SPOT exchange.
Producers with flexible assets (particularly batteries and curtailable solar) can participate by committing to a production or consumption schedule for the next day, buying when prices are low, selling when prices are high.
SGM supports day-ahead participation through scheduled setpoints: you submit a full 24-hour setpoint schedule the evening before, and the Gateway executes it autonomously, with no live API connection required during execution.
***
## aFFR, mFFR, FCR, Frequency regulation services
These are balancing services provided to grid operators to help maintain grid frequency:
* **FCR (Frequency Containment Reserve):** Automatic, symmetric response to frequency deviations within seconds.
* **aFFR (automatic Frequency Restoration Reserve):** Automated response to restore frequency after a disturbance, activated within minutes.
* **mFFR (manual Frequency Restoration Reserve):** Manually activated reserve, typically used for larger, slower imbalances.
BESS systems are well-suited to providing these services due to their fast response times. SGM support for frequency regulation services is currently under development.
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