Our A-Z guide of common energy terms.


Annual Quantity (AQ)

Annual Quantity or Annual Agreed Quantity (AAQ) is the sum of the annual consumption of all metered supplies on a site and is measured in Kilowatt hours (kWh).

Available Supply Capacity (ASC)

This is also sometimes referred to as Agreed Capacity (AC) and is the agreed maximum amount of electricity which a customer can take from the distribution system, measured in kVa.


Base Load

The lowest level of power demand from a site below which usage does not drop.  


A bearish market is one in which energy prices are falling or about to fall.

Bilateral Energy Trading

This is where two parties enter into a contract to deliver electricity at an agreed time in the future. This agreement may, for example, be between a generator and a supplier.

British Thermal Unit (BTU)

The British thermal unit (BTU or Btu) is a traditional unit of energy. It is equal to about 1055 joules.


A bullish energy market is one in which market prices are expected to rise.


Calorific Value (CV)

The amount of heat produced from burning a specified quantity of fuel, commonly measured in mega joules per cubic meter (MJ/m), kilowatt-hours per tonne or kilojoules per litre.

Carbon Emissions Trading Scheme

Carbon emissions trading targets carbon dioxide and seeks to reduce greenhouse gas emissions are controlled by setting a cap on total transmissions and allowing the trading of emissions allowances.

Carbon Trust

The Carbon Trust promotes a sustainable, low carbon economy and the development of low carbon technologies. It is an independent not-for-profit organisation that supports UK businesses in reducing carbon emissions through funding, innovation and efficiency.

Combined Cycle Gas Turbine (CCGT)

A gas fired plant that generates electricity.

Climate Change Levy (CCL)

The Climate Change Levy is a tax added to fuel bills. Discounts are available for those who enter into a Climate Change Agreement (CCA). Climate change agreements are voluntary agreements between UK organisations and the Environment Agency to reduce energy use and CO2 emissions

Combined Heat & Power (CHP)

Combined Heat and Power plants use technology that enables efficient production of electricity and heat together. Combustion is used to generate both electricity and heat which can both be used on site. The “waste’ heat, for example, can be used in manufacturing or district heating. This differs from conventional electricity generation where the heat generated is wasted.

Communication Charge

This is the fee charged to the customer each month for the collection of half hourly data by the meter operator.


Data Aggregator

The organisation responsible for aggregating the meter-reading data received from the appointed Data Collectors and forwarding it to suppliers.

Data Collector

The Data Collector collects, processes and validates meter reading data and passes the information to the Data Aggregator.

Demand Side Response

Organisations that use a lot of energy can choose to reduce the amount of power they draw from the grid during peak times by implementing Demand Side Response or Demand Side Management. This flexible approach to electricity use helps to reduce pressure on the National Grid when demand is high. In return, companies can receive payments for using less power at peak times.

Distribution System

This refers to the wires, transformers, substations and other equipment used locally to distribute and deliver energy to consumers.

DUoS (Distribution Use of System)

The DUoS is the charge for distributing electricity across the local system to the supplied sites.


Electricity Market Reform (EMR)

This is the government’s response to the challenges of decarbonising electricity supplies and meeting carbon reduction targets, ensuring security of supply and keeping costs as low as possible for consumers despite the need to upgrade the UK's power generating infrastructure.

Energy from Waste (EfW)

Also known as Waste to Energy, this is the processing of waste into a fuel source or the process of generating energy from the treatment of waste as an alternative to sending it to landfill.

European Emissions Trading Scheme

See Carbon Emissions Trading Scheme


Firm Gas

Gas supplied to a customer on a guaranteed basis, without interruption.

Forward Contract

An agreement to buy electricity from another party at a specified time in the future at a specified price with money changing hands at the delivery date. There is a subtle difference between a Forward Contract and a Futures Contract. Forward contracts are private agreements between two parties whereas Futures contracts and traded on the markets.

Fossil Fuel

An energy resource derived from natural organic materials, typically oil, coal and natural gas.

Futures Contract

Similar to a Forward Contract, Futures Contracts are traded on the exchanges on standardised terms.


Gate Closure

This relates to the moment prior to the start of the settlement period when bilateral contracting ends and the Balancing Mechanism for a trading period begins.


The production of electricity.

Gigawatt (GW)

A unit of power equal to 1 billion watts; 1 million kilowatts, or 1,000 megawatts.

Gigawatt-hour (GWh)

A unit of energy equal to million kilo-watt hours. 1 GWh is equivalent to the total electricity typically used by 250 homes in one year.

Grid Supply Point (GSP)

The point at which energy is taken from the National Grid transmission system into a local distribution system.


Half-hourly Meters

A device connected to a meter that allows the data collector to obtain half-hourly consumption data remotely..

Half-Hour Data (HHD)

This is the data collected from the half-hourly meter which is then used by the data collector for invoicing, tendering and reporting.


High Voltage (11,000 Volts or above).



A site that consumes electricity rather than generating and exporting power

Independent Public Gas Transporter (IGT)

An independent company responsible for maintenance of a gas supply network.

Infrastructure Costs

The costs associated with delivering power including the loss of heat between generation and transmission (Tloss) and distribution (Dloss) and the charges for using the transmission and distribution networks (TUoS and DUoS).


A material that reduces or stops the flow of electricity.


A connection or link between power systems that enables them to draw on each other’s reserve capacity in time of need.


Kilowatt (kW)

A standard unit of electrical power equal to 1,000 watts and used to measure Maximum Demand.

Kilowatt-hour (kWh)

A unit of energy consumed.


Liquidfied Natural Gas (LNG)

Natural gas condenses when cooled to minus 160 degrees to form Liquidifed Natural Gas (LNG).


The amount of electric power delivered or required (due to consumption demand) at any specific point or points on an electrical system.

Load Factor

Load factor is calculated by taking the number of units of consumption and dividing this by maximum demand, then dividing by the number of hours in the period and then multiplying by 100.

Load Management

Flexible use of electricity to allow scheduled use at periods of lower demand and price.


Low Voltage, normally at 240 or 415 Volts.


Maximum Demand

The highest peak of demand in a half hour period or between meter readings. MD is measured in either kW or kVA.

Mega Watt (MW)

One million watts or 1,000 kilowatts (kW).

Meter Point Reference Number

Unique reference number that identifies each meter and is used for supply tenders.


National Grid

The National Grid owns the power transmission systems in the UK and all domestically generated electricity is put into the National Grid before being fed into distribution networks.


A supply point with an AQ of over 73,00 kWh.

Notional Balancing Point (NBP)

A virtual point at which entry gas is brought into the system before being transported to an exit point by network users.  



Regulator of gas and electricity markets.


Pass Through Charges

Charges on invoices that relate to the costs of third parties involved in the energy supply chain to deliver power.

Peak Demand

The point of maximum electricity demand on the network.

Power Factor

A measure of how efficiently electricity is used on a site. Poor power factors reduce the capacity of the network to supply power and customers can be penalised for this by distribution companies.


Reactive Charges

Penalties imposed by some suppliers and distribution companies for Reactive Power.

Reactive Power (KVAR)

The difference between the electricity supplied and the electricity converted into useful power. A large difference indicates inefficiency.


OFGEM (Office of the Gas and Electricity Markets) is the UK’s energy regulator. It is a statutory body representing the interests of gas and electricity consumers in the UK.

Renewable Energy

Energy derived from resources that are regenerative such as solar, wind, wave and tidal and hydroelectricity.

Renewables Obligation

Electricity suppliers are required to  derive a specified proportion of the electricity they supply to their customers from accredited renewable sources under the Renewables Obligation (RO).  


A shipper buys gas from producers or importers, transports it through the gas network and sells it to customers either directly or through a third party.

Standing Charge

Daily or monthly charge to energy customers which contributes towards the local Distribution Network Operator’s (DNO).installation, maintenance and administration costs.

Sub Station

Sub stations form part of the national grid and  contain transformers which increase or decrease the voltage of an electric current.


The installation of a separate meter to monitor energy consumption.


A party that is licensed to supply electricity or gas to the National Grid Network, via the Shipper.

Supply Point Administration Agreement (SPAA)

This sets out the arrangements between gas suppliers and transporters in the UK retail market.


Terawatt-hour (TWh)

Equivalent to 1,000 gigawatt hours (GWh)


A unit of measurement for gas. 1 therm is equal to 29.3071kWh.


Equipment used to change the voltage of an electric current.


The transfer of electricity at high voltage from UK power stations to points where it can be distributed to users.

Transportation Charge

A charge made by National Grid for the transport of the shippers’ gas through the gas network to the customer. It is comprised of three elements: capacity charge, commodity charge and site charge.


The Triad demand level is calculated by taking the average of readings at three maximum demand points (in kW) of the supply at half hourly time periods.  

TUoS (Transmission Use of System)

The charges incurred for transmitting electricity across the National Grid network from the source of generation to the network of the local distribution company.


Unit price

The price per unit of energy, comprised of three elements:  energy wholesale price, infrastructure costs and a cost to serve element



A unit used to measure the electromotive force of an electric current.


Wind power

The conversion of energy in the wind into electrical power. Wind farms can be sited on land or at sea.