Energy Jargon Buster
The energy industry has a language of its own, and for many businesses juggling millions of tasks, deciphering complex energy terms could be time-consuming. To make things simpler, we have compiled a comprehensive A–Z of energy terminology to help you read your bills with confidence, negotiate contracts with clarity, and make informed decisions without the guesswork. Because when it comes to energy, understanding the details is where the value lies.
| Terms | Definition |
|---|---|
| A | |
| Agreed Capacity | The maximum amount of power (measured in kilovolt Amperes - kVA) for a property or address, as agreed with the local Distribution Network Operator (DNO). |
| Active Power | The actual amount of electrical energy being used and delivered at a moment, measured in kW and MW. |
| Air Source Heat Pump (ASHP) | A system that absorbs heat from the outside and transfers it inside to heat indoor spaces. |
| Alternating Current | A type of electric current that changes direction while flowing through a circuit. |
| Apex Load | The highest level of electricity demand recorded at a particular site. |
| Automatic Contract Rollover | When a contract automatically renews at the end of the contract, unless if no switch or cancellation is made. |
| A-Rated | Refers to appliances with the highest energy efficiency, based on the EU rating scale (ranging from A to G). Appliances in this category use less power and are better for both your budget and the environment. |
| AMR | Stands for Automated Meter Reads. A meter that collects automated usage data and can transfer data into the billing system. |
| Annual Quantity (AQ) | Refers to the amount of energy a site or meter point is expected to use in a year (on average). |
| Account Balance | It indicates whether your energy account has a credit balance or an outstanding amount due. |
| Account Number | A unique reference code that identifies your energy account. |
| Account Handler/Manager | A dedicated professional who manages your energy account and assists you with queries or concerns. |
| Annual Fuel Mix Disclosure | An annual report that shows where your energy supplier's electricity is coming from. |
| Allowed Interruption | A situation where a customer's electricity supplier is temporarily cut off, with the terms agreed in the contract. |
| B | |
| Billing Address | The address where energy bills are sent. |
| Back Billing | The process of billing a customer for electricity and gas that was not billed in the previous period. |
| Brown Energy | Electricity generated from non-renewable energy resources such as oil, coal, and natural gas. |
| Billing Cycle | The recurring timeframe, typically a month, during which an energy supplier calculates and bills your energy usage. |
| Baseload Power | The minimum amount of electricity required by businesses to keep their operations running. |
| BEIS (Department for Business, Energy & Industrial Strategy) | The government body responsible for managing the UK's energy and industrial policies has been renamed the Department for Energy Security and Net Zero. |
| Blend and Extend Tariff | An agreement in which an existing contract is extended while lowering energy rates. |
| Broker | A middleman, also known as a third-party intermediary (TPI), who acts as a link between the business and the energy supplier to help secure energy contracts (usually for a fee or commission). |
| Brownout | A planned (and temporary) drop in power supply to prevent a complete power outage, often to manage demand. |
| Balancing Mechanism | A real-time system operated by the National Grid to maintain balance between energy demand and supply. |
| Balancing Services Use of System (BSUoS) | BSUoS charges are applied to recover the costs of balancing the electricity transmission network, including activities such as demand forecasting, coordinating power generation, and ensuring stable voltage and frequency levels. |
| BCM (or bcm) | Stands for billion cubic meters, a unit of measurement for gas volume. |
| Bear Market | An energy trading term used when market prices are continuously declining over a certain period. |
| Bull Market | Opposite of bear market. A market situation where energy prices are generally rising over time. |
| British Electricity Trading And Transmission Arrangements (BETTA) | The UK framework for trading and transmitting electricity within a unified wholesale energy market. It was launched in 2005, replacing the former NETA (New Electricity Trading Agreements) scheme. |
| Biomass Boiler | A type of boiler that uses organic material like wood pellets instead of gas to produce heat, a renewable but not emission-free option. |
| C | |
| Cubic Meters | A standard unit for measuring gas volume. |
| Central Switching Service | A UK platform designed to make the supplier switching process more reliable, faster, and efficient. |
| Cooling-off Period | A time period allowing the customers to cancel their agreement without paying a cancellation fee. |
| Contract End Date | The date when agreement with the energy supplier officially comes to an end. |
| Contract Renewal | The act of continuing an energy contract once the current contract expires. |
| Change of Occupier (CoO) | The transfer of the energy account to a new occupier at the same premises. |
| Climate Change | Change in global weather and temperature patterns over time due to natural and human factors. |
| Climate Change Levy | Climate Change Levy, or CCL, is a government-imposed tax to encourage a reduction in carbon emissions and greater energy efficiency, applicable only to the units used. |
| Carbon Footprint | The amount of carbon emissions associated with daily activities or energy use. |
| Coefficient of Performance (CoP) | A performance measurement of how efficient a heat pump is, tested under controlled laboratory conditions. |
| Concessional Consumer Financing | A type of financing tha offer favorable loan conditions, such as low or no-interest, to help fund energy-saving upgrades, often with longer repayment plans. |
| Carbon dioxide | One of the main greenhouse gases, which is produced when fossil fuels like oil, coal, and gas are burnt to generate electricity. |
| Carbon dioxide equivalent | A way to measure and compare all greenhouse gases in terms of how much CO2 they equal in terms of climate impact. |
| Calorific Value | The amount of energy released when a specific volume of gas is burned. |
| Carbon Emissions Trading | A scheme where businesses can buy and sell carbon allowances to stay within emission limits. |
| Chargepoints | Stations where electric vehicles (EVs) can be plugged in to recharge their batteries. |
| Carbon Capture/Storage (CCS) | A method of trapping carbon dioxide produced from burning fossil fuels to prevent it from entering the atmosphere. |
| Carbon Credits | Carbon credits are permits that allow businesses to emit a certain amount of greenhouse gas emissions or trade them if they can reduce their emissions below the limit. |
| Climate Change Agreement | An agreement between the Government and a business user that offers lower Climate Change Levy charges if the business commits to set a target for energy efficiency or carbon reduction. |
| Carbon Neutral | Refers to any process or product that adds no net increase in CO2 emissions in the atmosphere, often achieved by reducing emissions or offsetting any emissions produced. |
| Carbon Offset | A way to balance out carbon emissions by reducing or removing them elsewhere through projects like renewable energy generation and energy-saving initiatives. |
| Connection Agreement | A formal document that outlines how much electrical capacity a property is allowed to use, as agreed with the Distribution Network Operator (DNO). |
| Corrector Meter | A meter attached to a gas meter at high-usage sites to ensure exact measurement under varying temperature and pressure rather than applying a fixed conversion factor. |
| Conversion Factors | A method used to convert gas usage from cubic metres to kilowatt hours for billing purposes. |
| Capacity Charge | Also known as an availability charge, set by DNO to fund network maintenance, repairs, and upgrades. The charge is based on the agreed capacity of a property. |
| Carbon Trading | A system that controls carbon emissions by setting limits and allows entities to buy or sell carbon allowances (credits) by putting a price on carbon, encouraging businesses to reduce their carbon emissions. |
| Capacity Market | A government-led auction that ensures enough power is available during periods of high demand by paying generators and buyers to be ready to deliver electricity when required. |
| Circular Economy | A way of managing resources where waste is minimised by reusing, recycling, and repurposing materials instead of throwing them away. |
| D | |
| Deemed Contract | A contract that comes into place when a customer starts using energy without formally agreeing to a contract with the energy supplier. |
| Distribution Network Operator (DNO) | The company responsible for operating and maintaining the local electricity distribution network. |
| Distribution Use of System (DUoS) Charges | Charges levied by DNO to cover the cost of building, operating, and maintaining the electricity distribution network. |
| Dual Fuel | A supply agreement where both electricity and gas are provided by the same energy supplier. |
| Direct Debit | An automated payment method where the customer authorises the energy supplier to withdraw an amount (variable or fixed) from their account on the scheduled date. |
| Deadlock Letter | A formal letter issued when a dispute cannot be resolved (within 8 weeks), giving the customer the right to escalate the matter to the Energy Ombudsman. |
| Data Collector | An accredited agent responsible for retrieving, validating, and forwarding energy usage data from meters to energy suppliers and data aggregators, enabling efficient bill processing. |
| Data Aggregator | An agent appointed by the energy supplier to aggregate the metering data received from Data Collectors and provide this data to Elexon. |
| Direct Current (DC) | A form of electrical current that flows only in one direction in a circuit, commonly produced by batteries and fuel cells. |
| Demand Side Response (DSR) | A scheme where businesses are rewarded to adjust their energy usage when the National Grid signals high demand on system stress. |
| Distribution Losses | Refers to the charges that cover energy loss, electricity is being distributed. |
| District Heating Network | A network of insulated pipes that transfers heat from a centralised source to multiple end users. |
| Daily Contract Quantity (DCQ) | A contracted gas supply volume that defines how much gas is delivered to a site each day. |
| Daily Meter (DM) | A metering requirement for businesses with high energy usage, often more than 58,600,000 kWh (or 2 million therms per annum), where usage must be measured daily as mandated by law. |
| Distribution Network (DN) | The operator responsible for managing and maintaining the local gas transmission system. There are currently eight distribution networks operating in the UK. |
| Dark spread | Refers to the difference between the market price of electricity and the cost of producing it by using coal. |
| Day-Ahead | A market where participants agree to buy and sell energy for the following day in advance. |
| Decentralised Energy | Refers to a system where electricity or heat is generated close to where it is used, such as a rooftop solar panel or local heat networks. This helps reduce energy loss and improve overall efficiency. |
| E | |
| Energy Tariff | A structured pricing plan that outlines the rate and charges for your energy consumption. |
| Estimated Annual Consumption | An estimate of the total energy a customer is expected to consume over the course of a year. |
| Energy Efficiency | The practice of using less energy to perform the same tasks or achieve the same results, ultimately saving money and minimising environmental impact. |
| Estimated Billing | A bill calculated based on estimated meter reads when actual meter reads are not available. |
| Erroneous Switch/Transfer | A switching error where the energy supply is transferred to another energy supplier without the customer's consent. |
| Energy Audit | An assessment of energy use to find ways to identify efficiency improvements. |
| ECOES | Stands for Electricity Central Online Enquiry Service. Designed to assist suppliers in the customer switching process by allowing the triangulation of data. |
| Electrical Vehicle | A vehicle that uses electricity as its main source of power rather than traditional fuel. |
| Energy Storage Systems | Refers to technology that captures and stores energy to be used later when needed the most, such as batteries. |
| Energy Performance Certificate (EPC) | A certificate that measures the energy efficiency of a building and determines how much energy it uses. |
| Emissions Trading Scheme | A carbon pricing scheme where businesses manage their carbon emissions by buying and selling carbon credits. |
| Evergreen contract | A contract with no fixed duration continues automatically until it is cancelled or updated. |
| Electric Current | Refers to the flow of electricity through a wire or a circuit, often measured in amperes (amps). |
| Electrical Cell | A device that generates or stores electricity (for later use). |
| Electricity Meter | A device that measures the amount of electricity used by a property over time for billing purposes. |
| Electricity Pool | A system of electricity trading between generators and energy suppliers. |
| Electromagnet | A magnetic field produced when electricity flows through a wire coiled around an iron core. |
| Electronic Data Interchange (EDI) | A secure electronic system that allows the transfer of billing data, allowing customers to receive their bills in a specified format. |
| Entry Point | Refers to a point where gas enters the National Transmission System from a terminal or supply source. |
| Energy Charter Treaty (ECT) | An international agreement that establishes a multilateral framework for cross-border cooperation in the energy industry to strengthen energy security through fair and open energy markets while adhering to sustainable development principles. |
| Exit Zone | A geographical area in the gas network where gas is delivered to the consumers through off-take points. |
| F | |
| Fixed-term Contract | An energy contract set for a specific period with fixed pricing terms and an end date. |
| Feed-in Tariff | A government-backed programme that pays producers for generating renewable electricity and feeding it into the grid. |
| Force Majeure | An unforeseen event beyond control, such as a natural disaster or major disruptions, interfering with a party's ability to meet the terms of the contract, usually relieves them of their obligations. |
| Forward Contract | An agreement to purchase electricity in advance at an agreed price, with settlement taking place at the time of delivery. |
| Fuel Cells | Devices that produce electricity from hydrogen and air, with water as a by-product. They are generally used in stationary power generation, transport, and portable electricity. |
| Fiscal Rules | Financial limits set by the government itself restrict spending and borrowing to keep public finances under control. This may influence energy policy and support schemes. |
| Flue | A passage or duct that carries the products of combustion safely into the atmosphere. |
| G | |
| Green Energy | Electricity generated from natural resources like solar and wind power, with no to little greenhouse gas emissions. |
| Global Warming | The gradual rise in Earth's average temperature due to increased carbon emissions in the atmosphere. |
| Greenhouse Gases | Gases such as carbon dioxide and methane that trap heat in the Earth's atmosphere, contributing to climate change and global warming. |
| Guaranteed Standards of Performance | The minimum service levels require licenced energy suppliers to meet while delivering specific customer service, enforced by Ofgem through Standard Licence Conditions (SLCs). |
| Gigawatt | A unit of power equal to 1 billion watts, often used for large-scale electricity generation. |
| Green Certificates | A certificate that proves that renewable electricity has been produced, representing its environmental value. They can be traded independently of the energy produced. |
| Grid Supply Point (GSP) | The point at which energy is transferred from the National Grid Transmission System to the local distribution network. |
| Green Gas Support Scheme (GGSS) | A support scheme that encourages the production of biomethane by providing tariff support to plants that inject it into the gas grid. Tariffs are calculated to cover the costs of building new infrastructure and ongoing operational costs. This is funded by the Green Gas Levy, applied to all licensed fossil fuel gas suppliers. |
| Grid Constraints | A situation where the transmission network cannot carry enough electricity from generation sites to demand areas. This often leads to curtailment of renewable energy and reliance on carbon-intensive generation. |
| Grid-Tied System | A setup where solar panels are connected to the national electricity grid, enabling both import and export of electricity. |
| H | |
| Half-hourly Meter | A business electricity meter that records usage every half hour. By using AMR (automatic meter readings), the usage is recorded without the hassle of manually taking your readings. |
| I | |
| Invoice | A document issued by the energy supplier listing the charges for the energy you have consumed, and you need to pay. |
| Internet of Things | A network of devices linked to the internet that can collect and share data with each other, such as smart meters and thermostats. |
| Independent Public Gas Transporter (IGT) | A company responsible for developing, operating, and maintaining local gas distribution networks in the UK. |
| K | |
| kWh | The standard unit for measuring energy consumption. Simply, the amount of energy used by a 1000-watt appliance for one hour. |
| L | |
| Lifecycle Assessment | A process that evaluates the environmental impact of a product at every stage, from production to disposal. |
| Load Balancing | A way of managing when and how much energy is used to avoid higher costs during peak demand. |
| Load Shedding | A controlled process where electricity is temporarily reduced or switched off to prevent overload on the grid. |
| Loyalty discount | A discount offered to a customer at a set time for staying with the current energy supplier without switching. |
| Local Distribution Zone (LDZ) | A defined geographical area within the gas network where gas is delivered to consumers through a system of local pipelines. |
| M | |
| Meter Serial Number | Also known as the meter ID. The number identifying your specific meter. |
| MPAN | Meter Point Administration Number refers to the unique 21-digit reference number for the electricity supply point at specific premises. Often called the supply number. |
| MPRN | Meter Point Registration Number refers to the unique identity of the gas supply point at specific premises, equivalent to MPAN. |
| Megawatt | A large-scale unit of electrical power equal to 1 million watts (1,000kW). |
| Meter Asset Manager (MAM) | A service provider responsible for managing electricity meters on behalf of their clients. This includes the replacement and arrangement of meter-related work while acting as the main point of contact. |
| Meter Asset Provider (MAP) | A party responsible for the installation of the meter at a site, with the meter ownership either held by MAM or a third party. |
| Meter Operator (MOp) | A service provider that looks after the metering equipment and its maintenance. |
| Market Segmentation | A process of categorising customers into different groups or segments to better understand their needs. |
| Market Share | The proportion of total customers in a market that are registered to a particular company or supply group. |
| Mutual variation | An agreed adjustment to contract terms, including prices, that can only be applied if both the energy supplier and the customer accept it. |
| Maximum Annual Quantity (MAQ) | Refers to the maximum level of gas that will be supplied to a customer's site within a contracted year. |
| Maximum Demand | A measure of peak electricity usage in any 30-min interval within a month or between two meter readings. |
| Meter Point Administration Service (MPAS) | The service is responsible for assigning Meter Point Administration Numbers (MPRN) to all electricity supply points in the UK. |
| Micro-Generation | Refers to the small-scale generation of electricity, often by homes or businesses, using technologies like solar panels or wind turbines. |
| Micro-combined Heat and Power | A system that generates heat and electricity from a single source, often electricity generated as a by-product. |
| N | |
| Non-commodity Charges | Charges on your bill covering non-energy expenses, such as the maintenance and installation of infrastructure to deliver electricity and gas to you |
| Non-half Hourly Meter | A meter that measures energy consumption without providing half-hourly usage data. |
| Net Zero | Achieving a balance between the greenhouse gas emissions released into the atmosphere and those removed. |
| National Balancing Point (NBP) | A virtual trading location where gas at the wholesale level is purchased and sold. |
| Non-Daily Metered Supply Point | A supply point where meter readings are taken less frequently than daily, such as monthly, quarterly, or yearly. |
| Nuclear Regulated Asset Base (RAB) | Nuclear RAB is a government-based funding model designed to finance the construction of future nuclear projects like Sizewell C. |
| Nuclear RAB Levy | Non-commodity charges applied to customers' electricity bills to support the funding of nuclear energy generation. |
| O | |
| Out-of-Contract Rate | The charges apply when you continue using energy after your current energy contract expires. |
| Outstanding Balance | The amount of money you owe to your energy supplier. |
| Outstations | Communication systems such as GSM, modem, and packnet used to remotely connect with a meter. |
| Offtake | Energy (gas or electricity) removed from the grid to meet user demand. |
| P | |
| Pass Through Charges | Charges added to bills that reflect the fees of third parties involved in delivering the energy supply. |
| Peak Demand | The time period during which energy usage reaches its highest point. |
| Power Factor | Measures how efficiently a site uses electricity. A lower power factor can increase strain on the network and lead to extra charges incurred by DNO. |
| Power Purchase Agreement | A long-term electricity purchase agreement between an electricity generator and a buyer (utility, government, or company). |
| Photovoltaic | The technology that converts sunlight into electrical energy using solar panels. |
| Prepayment Meter | Also known as a pay-as-you-go meter that lets customers pay in advance for gas and electricity before consumption. |
| Price Comparison Metric | A figure, also known as Tariff Comparison Rate (TCR), used to compare energy tariffs from your own or other energy suppliers, calculated using estimated annual costs for typical usage levels. It includes both standing charge and unit rate (s), but does not reflect the actual consumption. |
| R | |
| Renewable Energy | Energy generated from natural and never-ending energy sources, including sunlight, wind power, and water. |
| Reactive Power (KVAR) | Refers to the difference between the electricity supplied and the electricity used effectively. Excess reactive power can strain the network and may lead to extra charges (depending on how much electricity the customer accumulates) |
| Ratchet/Ratcheting | A commercial penalty charge applied when a site uses more energy than the agreed daily capacity during the winter months (October to May). |
| Renewable Obligation (RO) | A government-led initiative that promotes green energy by requiring energy suppliers to acquire a certain portion of their power from renewable energy resources. |
| REGO/Renewable Energy Guarantees of Origin | Certificate issued for each megawatt-hour of renewable energy produced, confirming its green origin. |
| S | |
| Smart Meter | A digital meter that shows real-time energy use and sends data to your energy supplier automatically. |
| Standing Charges | The standing charge (a daily fee for maintaining your gas and electricity connection) covers meter maintenance and infrastructure costs. |
| Supply Address | The site or property where gas or electricity is supplied. |
| SLCs | Stands for Standard Licence Conditions. Rules enforced by Ofgem that energy suppliers must follow to work in the energy markets. |
| Smart Export Guarantee | A tariff that allows people in Great Britain to earn money by exporting surplus electricity to the grid. |
| Supply Start Date (SSD) | Refers to a date when a customer's energy supply starts under a new contract. |
| Service Industry Code (SIC) | A classification code that determines the type of business operating at a site. |
| Standard credit | A payment method where customers pay for energy after getting a bill, rather than paying via direct debit or prepayment meter, within an agreed timeframe. |
| Switching Window | Refers to a set timeframe during which customers can switch energy suppliers without paying a termination fee, following their contract end notification. |
| Standard Variable Tariff | A pricing plan where energy prices may vary based on market conditions, rather than staying fixed. |
| Switch Objection | An objection to the customer's request to change energy supplier, due to contract or account-related concerns. |
| Spark Spread | Refers to the difference between the market price of electricity and its production cost using natural gas. |
| Shipperless | A gas supply point where a meter exists but is not registered within the industry. |
| T | |
| Transmission Network Use of System (TNUoS) | Charges applied to cover the cost of building, maintaining, and upgrading the electricity transmission network. |
| Transaction History | A record of all your energy account transactions, including payments and charges. |
| TRIAD | Refers to the three peak half-hour periods of electricity demand between November and February, used by National Grid to calculate TUoS charges. |
| Termination (exit) Fee | Fee applied when a customer cancels their contract before the agreed end date. |
| Time of Use tariff (ToU) | A tariff plan where energy costs may vary depending on the time of day it is used. Encouraging usage during off-peak hours. |
| Transformer | An electric device that transfers electric energy from one AC circuit to another and adjusts the voltage of electricity, either by increasing or decreasing it for safe use. |
| Therm | Non-SI unit of heat energy and used to measure natural gas usage for billing purposes. |
| U | |
| Unit Rate | The cost charged by an energy supplier for each unit of electricity or gas consumed. |
| U-Value | A measure of how well a building material prevents heat loss. The lower the U-Value, the better the insulation. |
| V | |
| VAT | Stands for Value Added Tax. A government-imposed tax applied to energy bills. |
| Vehicle-to-Grid (V2G) | Technology that enables electric vehicles to draw power from the grid and export it back during periods of high demand, helping balance supply and demand. |
| X | |
| Xoserve | Central Data Services Provider for Great Britain's Gas Market. Monitor and support how gas flows across the network, helping ensure the market runs smoothly, efficiently, and reliably. |
| Z | |
| Zonal Pricing | A method of dividing the transmission network into multiple pre-defined geographical zones, with each zone having uniform electricity pricing different from the other zones. |