A-Z reference
Plain-English definitions of the terms a UK business energy buyer actually meets: meter numbers, network charges, levies, contract structures and the bodies that run the market. Where a term has its own guide or tool on this site, the entry links straight to it.
A meter fitted with a communications device that sends readings to the data collector automatically, usually daily or half-hourly. AMR removes estimated bills and gives you consumption data you can actually analyse. It is common on larger gas and electricity supplies that do not yet have full half-hourly settlement.
See also: metering and data services
The industry estimate of how much gas a supply point uses in a year, expressed in kWh. It is recalculated periodically from historic meter readings and suppliers price gas contracts against it. If your AQ is badly out of date, your quotes and your transportation charges can be wrong too.
A charge paid by half-hourly metered sites for the supply capacity, in kVA, reserved for them on the local network. You pay for the agreed capacity whether you use it or not, and exceeding it triggers excess capacity charges. Reviewing agreed capacity against actual maximum demand is one of the simplest bill checks for larger sites.
See also: regional network charges
A flat block of electricity delivered at a constant rate across every hour of the period, day and night. UK baseload is the benchmark wholesale power product, and its forward price is the headline number most market reports quote. Sites with steady around-the-clock demand are 'baseload heavy' and tend to price more cheaply per kWh.
See also: UK baseload power prices
A renegotiation where a supplier blends the rates left on your current contract with today's market rates across a new, longer term. It can smooth a sharp price rise or lock in a dip, but the blended rate is not automatically a good deal. Always compare it against simply seeing out the existing term and buying the renewal separately.
The rulebook that governs how wholesale electricity is balanced and settled in Great Britain. Every licensed supplier and generator must accede to it. The BSC is administered by Elexon, which runs the settlement process that compares what parties contracted to buy or sell against what was actually metered.
The charge that recovers the cost of balancing the electricity system second by second: paying generators to turn up or down, managing constraints and keeping the grid stable. Since April 2023 it has been levied on suppliers as a fixed volumetric charge, which they pass through to business bills as part of non-commodity costs.
See also: regional network charges
A Great Britain scheme that pays generators, storage and demand-side providers to be available when the electricity system is tight. Capacity is secured through competitive auctions held years ahead of delivery. The cost is recovered from suppliers and appears on business bills as one of the policy elements within non-commodity costs.
See also: non-commodity cost calculator
A tradeable permit to emit one tonne of carbon dioxide equivalent. UK Allowances (UKAs) are the unit of the UK Emissions Trading Scheme and EU Allowances (EUAs) are the unit of the EU scheme. Their market prices feed into wholesale electricity costs, because fossil-fuelled generators must buy allowances to cover their emissions.
See also: carbon allowances explained
A UK government tax on business use of electricity, gas and solid fuels, charged per kWh as a separate line on the bill. Domestic use and charities engaged in non-commercial activity are excluded, and energy-intensive businesses with a Climate Change Agreement pay a discounted rate. The rates are set by HM Treasury and change at the start of each tax year.
See also: non-commodity cost calculator
The government's main support scheme for new low-carbon generation such as offshore wind. Generators receive a fixed strike price: when the market price is below it they are topped up, and when the market is above it they pay the difference back. The net cost or benefit flows through suppliers onto business electricity bills.
The process of telling the supplier that a business has moved into or out of a premises. Until the change is registered, the incoming occupier is billed on deemed rates and the outgoing occupier can remain liable for the supply. Completing a COT promptly, with the move date and proof of occupancy, protects both parties.
See also: deemed and out-of-contract rates
Domestic energy contracts come with a 14-day right to cancel, but business energy contracts generally have no cooling-off period at all. A verbal agreement on a recorded line or a signed contract is usually binding immediately, even for microbusinesses. Check the terms carefully before you agree, because there is normally no way back.
A two-rate electricity tariff where the meter records day and night consumption separately and each is billed at its own unit rate. Night units are cheaper, so the structure suits sites with significant overnight load such as cold storage or electric heating. The meter's profile class and time switch determine when the night register applies.
Two appointed agents in the electricity metering chain. The data collector retrieves and validates meter readings; the data aggregator sums them and passes them into settlement. Half-hourly sites appoint a DC/DA alongside a meter operator, and the contracts are separate from the supply contract itself.
See also: metering and data services
A contract you have not actively negotiated. Default tariff under a regulated cap. Applies to the bulk of English business sites that have never switched retailer since market opening on 1 April 2017.
Read in context: What happens to your water account if your retailer goes bust
The rates a supplier charges when a business uses energy at a premises without having agreed a contract, most often after a change of tenancy. Deemed rates are typically far higher than negotiated rates, but you are free to agree a contract or switch supplier at any time, with no termination fee.
See also: deemed and out-of-contract rates
Adjusting your electricity consumption, or running on-site generation and storage, in response to signals from the grid or your supplier, usually in return for payment. Businesses use DSR to earn revenue from flexibility they already have, such as chillers, pumps or standby generators, while helping balance the system.
See also: demand side response for business
The regional company that owns and operates the local electricity wires carrying power from the transmission network to your meter. Great Britain is divided into 14 distribution licence areas. You cannot choose your DNO, and you pay for its network through the DUoS element of your bill.
See also: find your network operator
The charge made by your Distribution Network Operator for using the local wires. It varies by region, voltage and, for half-hourly sites, by time of day, with the most expensive band covering weekday evening peaks. DUoS is one of the larger non-commodity costs on a business electricity bill.
See also: regional network charges
The industry's estimate of how much electricity a non-half-hourly meter uses in a year, calculated from historic readings. It is used in settlement and by suppliers when pricing contracts. An accurate EAC matters: quotes, reconciliation and volume tolerances all hang off it.
The body that administers the Balancing and Settlement Code for the GB electricity market. Elexon runs settlement, the process that compares what each supplier and generator contracted against what was actually metered in every half hour, and works out who owes what for the differences.
A mandatory energy assessment scheme for large UK undertakings: those with at least 250 employees, or with annual turnover above £44 million and a balance sheet above £38 million. Qualifying organisations must audit their energy use every four years and report compliance to the Environment Agency.
See also: carbon compliance services
The European Union's cap-and-trade scheme, under which covered installations and airlines must surrender one EU Allowance for every tonne of carbon dioxide equivalent they emit. The cap falls over time, pushing the carbon price up. UK businesses with EU operations, or supply chains exposed to EU carbon pricing, still track it closely.
See also: EU ETS carbon prices
An electricity tariff designed around electric vehicle charging, typically offering cheaper units in defined overnight windows. For businesses running fleets, charging strategy also interacts with agreed supply capacity and time-of-day network charges, so the tariff is only part of the cost picture.
A closed support scheme that paid owners of small-scale renewable generation, such as rooftop solar, for the electricity they generated and exported. It closed to new applicants in March 2019, but existing agreements continue for their full term and the scheme's costs are still recovered through electricity bills.
A supply contract where the unit rate and standing charge are locked for the term, commonly one to five years. It gives budget certainty, but read the small print: volume tolerance clauses and pass-through wording can mean parts of the price still move. Check exactly which cost components are fixed.
See also: fixed price business energy quote
A contract that lets you buy your energy in multiple tranches over time rather than fixing everything on one day. You take positions against the wholesale market, lock in dips and can often sell volume back if prices fall. Flex suits larger users with the appetite and governance to manage market risk, usually with a trading partner.
See also: flexible purchasing and trading
A fixed contract where the supplier also fixes the non-commodity costs, taking on the risk that network and policy charges change during the term. You pay a premium for that certainty compared with a pass-through structure, but the rate you sign is the rate you pay.
The companies that own and operate the local gas pipes carrying gas from the national transmission system to your meter. Four GDN groups cover Great Britain, alongside smaller independent gas transporters that serve some newer developments. Their transportation charges are built into your gas price.
See also: find your network operator
The EU certificate evidencing that one MWh of electricity was generated from renewable sources, the European counterpart of the GB REGO. EU GOOs are no longer recognised for Great Britain's fuel mix disclosure, following the government's decision to end recognition from April 2023, so GB green tariffs are evidenced with REGOs.
Metering that records consumption in every 30-minute period and submits it automatically into settlement. It is mandatory for the largest electricity supplies and was extended to many medium-sized sites by P272. The industry's market-wide half-hourly settlement programme is extending this granularity to all meters.
See also: metering and data services
This is the regulated safety net for the English business water market. If a retailer can no longer serve its customers, Ofwat asks MOSL, the body that runs the market, to move those customers across to other licensed retailers. While that happens, customers are placed on interim terms and the price they pay is capped by the Retail Exit Code.
Read in context: What happens to your water account if your retailer goes bust
The unit of apparent power, used to express electrical capacity. Your agreed supply capacity, the amount of network reserved for your site, is set in kVA and billed through the availability charge. Apparent power combines the useful power you consume with any reactive power your equipment draws.
See also: energy calculators
Power that flows to and from inductive equipment such as motors and transformers without doing useful work, measured in kVArh. Networks still have to carry it, so half-hourly bills can include reactive power charges when it is excessive. Power factor correction equipment usually pays for itself quickly on affected sites.
The standard unit of energy on a utility bill: one kilowatt of power sustained for one hour. Both gas and electricity are billed per kWh, with gas converted from the metered volume using a calorific value calculation shown on the bill.
A signed letter authorising a third party, such as a broker or consultant, to request information and deal with suppliers on your behalf. A standard LOA is information-only: it does not let anyone sign a contract for you unless it explicitly says so. LOAs are time-limited, so check the scope and expiry before signing.
A scaling factor applied in settlement to account for electricity lost as heat in the wires between the network and your meter. The LLF class, which appears in your MPAN's supply number, also identifies which distribution charging band your site falls into.
See also: find your MPAN
The highest rate of electricity consumption your site reaches in a given period, measured in kW or kVA over half-hour intervals. It is the figure to compare against your agreed supply capacity: too close and you risk excess charges, far below and you are paying for capacity you never use.
A business qualifies as a microbusiness for energy purposes if it has fewer than 10 employees (or full-time equivalents) and annual turnover or balance sheet total of no more than £2 million, or if it uses no more than 100,000 kWh of electricity a year, or no more than 293,000 kWh of gas a year. Microbusinesses get extra protections under supplier licence conditions, including clearer contract terms and renewal information.
The party appointed to install and maintain the metering equipment on a half-hourly electricity supply, under a meter operator contract that is separate from the supply contract. If you do not appoint one, you can be placed on default terms that usually cost more than a negotiated MOP contract.
See also: metering and data services
MOSL (Market Operator Services Limited) runs England's competitive non-household water market, operating the central system that records every supply point and processes retailer switches. Open Water is the name of the market programme itself, which opened English business water retail to competition in April 2017.
See also: business water explained
The 21-digit reference that uniquely identifies an electricity supply point, printed on the bill as the S-number grid. The bottom row is the core MPAN; the top row carries the profile class, meter time-switch code and line loss factor that drive how the supply is charged. You need it for quotes and switching.
See also: find your MPAN
The unique reference, up to 10 digits, that identifies a gas supply point. It appears on the gas bill and is the gas equivalent of the electricity MPAN. Suppliers and brokers need it to price and switch a gas supply accurately.
See also: find your MPRN
One thousand kilowatt hours. Wholesale electricity is quoted in pounds per MWh, while retail bills are quoted in pence per kWh, so dividing a wholesale price by ten converts it to its pence-per-kWh equivalent.
See also: live wholesale market data
The virtual trading point for wholesale gas in Great Britain. Gas traded anywhere on the national transmission system is treated as being at the NBP, and prices are quoted in pence per therm. NBP forward prices are the main driver of business gas quotes.
See also: NBP gas prices
The publicly owned operator of Great Britain's electricity system, launched in October 2024 to take over from National Grid ESO. NESO balances supply and demand in real time, procures balancing services and leads strategic planning for both the electricity and gas systems.
The point where the greenhouse gases an organisation or country emits are balanced by those it removes, leaving no net addition to the atmosphere. The UK has a legally binding target of net zero by 2050. For a business, the practical work is measuring Scope 1, 2 and 3 emissions, reducing them, and only then offsetting what remains.
See also: sustainability roadmap tool
Everything on an energy bill that is not the wholesale energy itself: network charges such as DUoS, TNUoS and BSUoS, policy costs such as the RO, FiT, CfD and Capacity Market, plus metering and supplier costs. They make up a substantial share of a business electricity bill, which is why contract structure (fixed, pass-through or flex) matters.
See also: non-commodity cost calculator
The Office of Gas and Electricity Markets, Great Britain's energy regulator. Ofgem licenses suppliers and network companies, sets network price controls, enforces consumer protections and administers schemes such as the REGO register. Its rules on microbusinesses and broker dispute resolution directly affect smaller business energy buyers.
The rates charged when a fixed-term contract ends without a renewal or switch in place, or before a new contract starts. They are among the most expensive rates a supplier offers, often a multiple of contracted prices. Diarising end dates and termination windows is the cheapest energy-saving measure there is.
See also: out-of-contract rates explained
The industry change that moved electricity meters in profile classes 05 to 08, mostly medium-sized business sites with maximum demand meters, into half-hourly settlement. The migration completed in April 2017. It was the forerunner of today's market-wide half-hourly settlement programme.
A contract where the wholesale energy element is fixed or traded, while non-commodity charges are passed through at cost as they change during the term. The headline rate looks lower than a fully fixed deal, but your budget carries the risk of network and policy charges moving.
The hours of highest electricity demand and price. In the GB wholesale market the standard peak product covers 7am to 7pm on weekdays, and sites that consume heavily in those hours pay more per kWh than baseload-heavy sites. Shifting load out of peak windows is a core demand-management tactic.
See also: UK power prices
The ratio of useful (active) power to total apparent power drawn by a site, expressed between 0 and 1. A low power factor means equipment is drawing excess reactive power, which can trigger reactive charges and inflate the capacity your site needs. Correction equipment raises the ratio and cuts those costs.
A long-term contract to buy electricity directly from a specific generator, such as a wind or solar farm. Corporate PPAs are typically sleeved through a licensed supplier and bundle the power with its REGOs, giving price certainty and a credible renewable claim. Terms commonly run for many years, so they suit organisations with stable demand.
The Ofgem-issued certificate proving that one MWh of electricity was generated from renewable sources. Suppliers use REGOs to evidence green tariffs in the annual fuel mix disclosure. When comparing renewable contracts, ask whether the REGOs come bundled with power from identified generators or are bought separately.
A closed support scheme that obliged suppliers to source a rising share of electricity from renewable generators, evidenced by Renewables Obligation Certificates. It closed to new generating capacity in March 2017, but accredited generators keep receiving support, so the cost remains on bills as one of the larger policy charges.
The Greenhouse Gas Protocol's three categories of emissions. Scope 1 covers direct emissions from fuel you burn on site or in vehicles; Scope 2 covers emissions from the electricity and heat you purchase; Scope 3 covers everything else in the value chain, from purchased goods to business travel. Most reporting frameworks, including SECR, are built around them.
See also: carbon compliance services
The UK framework requiring quoted companies, and large unquoted companies and LLPs, to disclose their energy use, emissions and efficiency actions in their annual report. Large means meeting at least two of: 250 or more employees, turnover above £36 million, balance sheet above £18 million.
See also: carbon compliance services
The industry process that compares the energy each supplier contracted to buy with what its customers actually consumed in every half hour, and cashes out the differences at the imbalance price. Electricity settlement runs under the Balancing and Settlement Code, administered by Elexon. Accurate metering data is what keeps your supplier's costs, and your prices, honest.
A meter that records consumption in detail and sends readings automatically over the national smart metering network, ending estimated bills. Smaller business sites are typically offered the same SMETS-standard meters as households. The half-hourly data a smart meter produces is also the foundation for spotting waste and out-of-hours load.
See also: metering and data services
Ofgem's safety net when a supplier fails: another supplier is appointed to take on its customers so that supply never stops. Customers are moved onto the new supplier's deemed terms and are free to negotiate or switch. Domestic credit balances are protected in the process; business credit balances are not guaranteed.
The fixed daily amount on a bill that applies regardless of how much energy is used. It recovers fixed costs such as metering and a share of network charges. When comparing quotes, always weigh the standing charge and unit rate together against your actual consumption profile.
The charge that recovers the cost of the high-voltage transmission network, set by NESO. Since Ofgem's Targeted Charging Review took effect, most of the demand charge is a fixed daily amount based on the site's charging band rather than the old Triad peak-chasing regime. It is a significant non-commodity cost for larger sites.
See also: regional network charges
A third-party intermediary that advises on and arranges energy contracts on a business's behalf. TPIs are paid either by a fee from the client or by commission added to the supplier's unit rate, so always ask exactly how, and how much, yours is paid. Reputable TPIs disclose commission in writing.
See also: broker commission calculator
The UK's cap-and-trade carbon scheme, launched on 1 January 2021 to replace the UK's participation in the EU ETS. Energy-intensive industry, power generation and aviation must surrender one UK Allowance per tonne of carbon dioxide equivalent emitted. The UKA price flows into wholesale electricity costs for every business.
See also: UK ETS carbon prices
The price paid per kWh of energy consumed, quoted in pence. It is the headline number on a quote, but never compare unit rates in isolation: standing charges, capacity charges, contract structure and any broker uplift all change the true cost per delivered kWh.
See also: business energy quote
A portfolio of distributed assets, such as batteries, standby generators and flexible loads across many sites, aggregated and operated as if it were one power station. The operator trades the combined flexibility in energy and balancing markets, and participating businesses share the revenue.
See also: virtual power plants explained
The market where generators, suppliers and traders buy and sell gas and electricity ahead of delivery, from years out to within the day. Wholesale prices are the largest single driver of business energy quotes, which is why timing a purchase against the forward curve matters as much as picking a supplier.
See also: live wholesale market data
Knowing the terms is half the job. The other half is buying well: tracking the wholesale market, timing the purchase and getting the contract structure right for your sites.