Energy Glossary: Simplifying The UK Energy Market Terms
Not sure what all those energy industry terms mean? Our glossary keeps it simple, so you can understand your bills, key terms, and feel more in control.
A
ADR (Alternative Dispute Resolution)
A process to resolve complaints between a customer and an energy supplier without going to court, often through an ombudsman.
Aggregate Consumption
The total energy used by a group of customers over a period, typically measured in kilowatt-hours (kWh).
AMR Meter (Automated Meter Reading)
A type of meter that automatically sends usage data to suppliers without the need for manual readings.
Annual Statement
A yearly summary provided by energy suppliers showing total consumption, payments made, contract status, and any outstanding balances.
AQ (Annual Quantity)
The estimated yearly gas usage for a site, based on historical data. Used for billing purposes.
APR (Annual Percentage Rate)
Represents the yearly interest rate for borrowed funds; may appear in payment plans or financing options, though less common in energy contracts.
B
Back-Billing
When a supplier charges for energy used in the past that wasn’t previously billed, often due to missed meter readings or errors.
Balancing Mechanism
A system used by National Grid ESO to ensure electricity supply meets demand in real-time.
Baseload
The minimum level of continuous demand on the electricity supply system.
Bifacial Solar Panels
Solar panels that generate electricity from both sides, increasing efficiency.
Bioenergy
Renewable energy made from organic materials such as plant or animal waste.
Biomass
Organic material (like wood chips or waste) used to generate heat and electricity.
C
Capped Price
An energy tariff that limits how high your unit rate can go during the contract term, though it can still drop if the market falls.
Capacity Market
A mechanism where energy suppliers are paid to guarantee future electricity supply capacity.
Carbon Credit
A permit that allows a business to emit a certain amount of CO₂. Can be bought or sold in carbon markets.
Carbon Footprint
The total amount of greenhouse gases emitted, directly and indirectly, by an individual, organisation, product, or activity, usually measured in tonnes of CO₂ equivalent.
Carbon Intensity
The amount of carbon dioxide emissions produced per unit of electricity generated, often measured in grams of CO₂ per kWh.
CHP (Combined Heat and Power)
A highly efficient method of generating electricity and useful heat from the same energy source.
Climate Change Levy (CCL)
A government tax on business energy use, intended to encourage energy efficiency and reduce carbon emissions. Exemptions or discounts may apply.
Code of Practice
Standards and procedures that energy suppliers must follow, often in areas like customer service, billing, or dealing with vulnerable customers.
Commodity Charges
The cost of the actual gas or electricity consumed by a business. This includes the wholesale market price, supplier margin, and any risk premiums added by the supplier. Commodity charges can vary depending on market conditions, time of year, global fuel prices, and demand.
Contract End Date
The date your fixed energy contract ends. Failing to renegotiate can lead to expensive out-of-contract rates.
Cooling-Off Period
A set timeframe (usually 14 days) after agreeing to a contract during which a business or individual can cancel without penalty.
D
Decarbonisation
The process of reducing carbon emissions from business activities, particularly energy consumption.
Decentralised Energy
Energy generated close to where it’s used, such as rooftop solar, reducing transmission losses.
Deemed Energy Contract
A mechanism where energy suppliers are paid to guarantee future electricity supply capacity.
Demand Side Response (DSR)
When a business reduces or shifts its electricity use during peak periods to help balance the grid and potentially earn incentives.
Dual Fuel
When a business or household buys both gas and electricity from the same supplier.
DUoS (Distribution Use of System)
Charges that businesses pay to use the local electricity distribution network. Varies by region and time of use.
E
Economy 7 / Economy 10
Metering systems and tariffs that offer cheaper electricity rates during off-peak hours, typically at night.
Energy-as-a-Service (EaaS)
A model where businesses pay for energy performance (e.g., lighting) instead of owning the infrastructure.
Energy Broker
A third party that helps businesses compare and secure energy contracts, often working with multiple suppliers.
Energy Consumption
The amount of energy used by a business over a given period, measured in kWh or MWh.
Energy Efficiency
Measures or technologies that reduce energy consumption without affecting productivity.
Energy Mix
The combination of energy sources (renewable, nuclear, fossil fuels, etc.) used to meet demand.
Energy Management
The process of monitoring, controlling, and optimising energy production and consumption to reduce costs, improve efficiency, and lower environmental impact.
EMS (Energy Management Systems)
Software and tools that monitor, control, and optimise energy use in buildings, factories, or grids to reduce costs, improve efficiency, and support sustainability.
EPC (Energy Performance Certificate)
A document grading the energy efficiency of a building from A (most efficient) to G (least efficient).
Energy Tariff
The pricing plan agreed between a business and an energy supplier, which can be fixed, variable, green, or capped.
EVs (Electric Vehicles)
Cars, vans, or other vehicles powered by electricity stored in batteries rather than fossil fuels, reducing emissions and supporting the transition to cleaner transport.
F
Feed-in Tariff (FiT)
A discontinued UK scheme that paid small producers for the electricity they generated and fed into the grid.
Fixed Energy Tariff
A contract where the unit rate stays the same for the agreed term.
Flexible Energy Tariff
A contract where the unit price can change with the market, potentially offering savings but carrying risk.
Fossil Fuels
Traditional sources of energy such as coal, oil, and gas, which are non-renewable and carbon-intensive.
G
Geothermal Energy
Renewable energy derived from natural heat beneath the Earth’s surface.
Green Energy
Electricity or gas sourced from renewable resources such as wind, solar, or hydro.
Green Tariff
A tariff that ensures some or all of the electricity you use is matched with renewable energy or carbon offsetting.
Ground Source Heat Pump (GSHP)
A system that extracts natural heat from the ground to heat buildings.
H
Half-Hourly (HH) Metering
Advanced metering that records electricity consumption every 30 minutes. Mandatory for businesses using large volumes of electricity.
Heat Pumps
Energy-efficient systems that extract heat from the air, ground, or water to provide heating and hot water for buildings, and sometimes cooling.
High/Low Energy User
Classifications based on consumption. High users may have bespoke tariffs, while low users may be offered simplified or bundled rates.
I
Inverter (Solar Inverter)
A device that converts DC electricity from solar panels into AC electricity for use.
IO (Integrated Operations)
A collaborative approach in the energy sector that combines people, processes, and digital technologies to improve decision-making, efficiency, and safety in operations.
IoT (Internet of Things)
A network of connected devices, sensors, and systems that communicate and share data over the internet. In the energy sector, IoT is used for smart meters, predictive maintenance, and real-time energy monitoring to improve efficiency and reduce costs.
K
kWh (Kilowatt-hour)
The standard unit for measuring electricity consumption – 1,000 watts used for one hour.
L
Letter of Authority (LOA)
Authorises a third party (like an energy consultant) to act on your behalf.
Load Factor
A measure of how consistently a business uses energy over time, calculated by comparing average load to peak load.
Load Shedding
Temporarily reducing electricity usage to avoid overloading the grid or lowering demand costs.
M
Meter Reading
The process of recording your meter’s current energy usage data, either manually or automatically, to ensure accurate billing.
MHHS (Market-Wide Half Hourly Settlement)
A UK energy market reform that uses smart meter data to settle electricity consumption every half hour, making the grid more efficient and enabling better demand management.
Microbusiness
A business that uses less than 100,000 kWh of electricity or 293,000 kWh of gas per year, or has fewer than 10 employees and an annual turnover below €2 million.
MOP (Meter Operator)
Responsible for installing and maintaining half-hourly electricity meters. Businesses with HH metering must appoint a MOP.
MPAN (Meter Point Administration Number)
A unique 13-digit number used to identify your electricity supply point. Often referred to as a “supply number”.
MPRN (Meter Point Reference Number)
A unique number for your gas supply point, used by suppliers to identify and bill the correct site.
MWh (Megawatt-hour)
Equal to 1,000 kilowatt-hours. A common unit of measurement for large energy users.
N
Net Metering
Allows users to export excess on-site generated electricity (like solar) back to the grid in exchange for bill credits.
Net Zero
A state where your business’s greenhouse gas emissions are balanced by carbon removal or offsetting, often a key sustainability target.
Non-Commodity Charges
All additional costs associated with delivering, managing, and regulating energy supply. These charges are typically passed through by suppliers and can make up a large portion of a business energy bill.
Non-Half-Hourly (NHH) Metering
Traditional electricity metering method where consumption is estimated or read periodically, rather than recorded every 30 minutes.
O
Ofgem
The UK’s energy regulator, responsible for protecting customers and ensuring fair competition in the energy market.
Off-Grid System
An independent energy system not connected to the main electricity grid, usually powered by renewables and batteries.
Offshore Wind
Offshore wind farms generate electricity from wind turbines in the sea.
Onshore Wind
Onshore wind farms generate electricity from wind turbines located on land.
P
Pass-Through Charges
Elements of an energy bill (like DUoS, TNUoS, CCL) that may be itemised separately and “passed through” to the customer typically at cost.
Photovoltaics (PV)
Technology used in solar panels to convert sunlight directly into electricity.
Powershoring
The relocation of energy-intensive industries to regions with abundant, clean, and reliable energy sources, often to reduce carbon impact and supply chain risk.
PPA (Power Purchase Agreement)
A long-term contract to buy electricity from a renewable generator, often used by corporates.
R
REGO (Renewable Energy Guarantees of Origin)
Certificates that show electricity has been generated from renewable sources, helping businesses and consumers verify green energy claims.
Renewable Energy
Energy generated from naturally replenishing sources such as solar, wind, hydro, and biomass, offering a sustainable alternative to fossil fuels.
RTS (Radio Teleswitch Service)
A legacy UK system that used longwave radio signals to control off-peak electricity tariffs and appliances; it is being phased out as smart meters replace it.
S
Smart Export Guarantee (SEG)
A UK initiative paying small-scale renewable generators for the electricity they export to the grid.
Smart Meter
A digital device that records energy usage in near real-time and can send data automatically to suppliers.
Solar Panels
Devices that convert sunlight directly into electricity using photovoltaic (PV) cells, commonly used in homes, businesses, and large-scale renewable energy projects.
Solar Thermal
Uses sunlight to heat water or air directly, often for domestic or commercial hot water systems.
Standing Charge
A fixed daily fee covering the cost of keeping your business connected to the energy network.
Supply Capacity
The maximum amount of electricity a business site can draw from the grid. Charges may apply if usage exceeds agreed capacity.
T
TCR (Targeted Charging Review)
A reform by Ofgem that changes how electricity network costs are charged, moving from usage-based to fixed fees to ensure fairer billing.
TNUoS (Transmission Network Use of System)
A charge to cover the cost of maintaining the high-voltage electricity transmission network.
Transmission
Transporting electricity from generation sites to distribution networks.
Triads
The three half-hour periods of peak demand during winter used for charging large users on certain tariffs.
U
Unit Rate
The cost per unit of energy (e.g., per kWh) used. This is the variable part of your bill, multiplied by your consumption.
Utility
A general term for service providers that deliver essentials like gas, electricity, and water.
W
Wind Load Factor
The ratio of actual energy output to the theoretical maximum output of a wind turbine.
Wind Turbine
A device that converts wind energy into electricity through rotating blades connected to a generator, used in both onshore and offshore wind farms.
