Energy Industry Glossary: Terms Explained

The energy industry can be full of technical jargon and complex terms — but understanding the basics shouldn’t be a barrier. Our Energy Industry Glossary is here to break it all down. Whether you’re comparing energy tariffs, exploring renewable solutions, or just trying to make sense of your bill, this glossary offers clear, simple definitions to help you stay informed.

A

ADR (Alternative Dispute Resolution)

A process to help 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)

While less common in energy contracts, this may appear in payment plans or financing options, representing the yearly interest rate for borrowed funds.

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. Regulations limit how far back suppliers can charge.

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.

Bioenergy

Renewable energy made from organic materials such as plant or animal waste.

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 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.

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 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 Tariff

The pricing plan agreed between a business and an energy supplier, which can be fixed, variable, green, or capped.

EPC (Energy Performance Certificate)

A document grading the energy efficiency of a building from A (most efficient) to G (least efficient).

F

Feed-in Tariff (FiT)

A former government scheme that paid businesses for generating their own renewable electricity (now closed to new applicants).

Fixed Energy Tariff

An agreement where the unit rate remains constant for the duration of the contract, offering protection from market fluctuations.

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

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.

H

Half-Hourly (HH) Metering

Advanced metering that records electricity consumption every 30 minutes. Mandatory for businesses using large volumes of electricity.

High/Low Energy User

Classifications based on consumption. High users may have bespoke tariffs, while low users may be offered simplified or bundled rates.

K

kWh (Kilowatt-hour)

The standard unit of energy used to measure electricity consumption. One kWh equals 1,000 watts used for one hour.

L

Letter of Authority (LOA)

A document allowing an energy broker or consultant to act on behalf of a business when obtaining quotes or accessing meter data.

Load Factor

A measure of how consistently a business uses energy over time, calculated by comparing average load to peak load.

Load Shedding

Reducing or stopping electricity usage during peak periods to avoid overloading the grid or reduce costs.

M

Meter Reading

The process of recording your meter’s current energy usage data, either manually or automatically, to ensure accurate billing.

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 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.

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.

PPA (Power Purchase Agreement)

A contract between an electricity buyer and a generator, often used in corporate renewable energy deals.

S

Smart Meter

A digital device that records energy usage in near real-time and can send data automatically to suppliers.

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

The process of transporting electricity from power stations to local distribution networks over long distances.

Triads

The three half-hour periods of highest national electricity demand during winter. Businesses with HH meters can be charged more during these periods if they are on certain tariffs.