Glossary of Terms
AMR
Automated Meter Reading - automatic collection of data from meters which is transferred to a central database for billing and/or analysis.
AQ
Annual quantity. The sum of the annual consumption of all meters on a site. Measured in kWh or Therms.
Balancing Mechanism
The mechanism by which electricity demand is matched with electricity generation as near to real time as possible. It currently operates from three and a half hours ahead of delivery of the power up to the actual time of delivery.
Calorific Value
This relates to the British Thermal Unit Correction Factor, which transfers the volume of gas to a measure of heat. This figure changes on a monthly basis, according to the ambient pressure and temperature of the gas within the system and is the multiplier by which cubic feet as a volume is converted into a measure of heat.
Capacity
Supply Capacity (or Availability) is a limit on monthly maximum demand agreed between the user and the regional distributor (normally via the supplier). Measured in kVA.
CHP
Combined Heat & Power. A device used for the simultaneous generation of electrical power and heat for a building or several buildings.
Climate Change Levy
A customs and excise levy charged to most commercial users of gas since 2001. The levy is applied at a fixed rate per kilowatt hour.
Climate Change Levy
A customs and excise levy charged to most commercial users of electricity since 2001. The levy is applied at a fixed rate per kilowatt hour.
Combined Heat and Power (CHP)
A power generation plant which produces electricity and uses the waste heat generated to warm a building or buildings. This may be small scale inside a factory or large scale where heat from a power station is used to provide heating for a local district containing domestic, commercial and industrial premises.
Communication Charges
Communication charges cover the cost of the telephone line or cellular link used for remote access to the electricity meter. This applies to half-hourly metered sites only. Communication charges can be billed to the customer by either the meter operator or the supplier.
Correction Factor
Used by suppliers to calculate gas bills. The correction factor and the calorific value are the two variables used in the process of converting gas volume (as measured by the meter in cubic feet or cubic metres) into a measure of energy in kilowatt hours (kWh). Charges are based on kilowatt hours.
Cubic Feet
Unit of measure for volume of gas recorded by imperial meters.
Cubic Meters
Unit of measure for volume of gas recorded by metric meters. One cubic metre = 35.31 cubic feet.
De Minimis
If the amount of gas supplied to a commercial site is less than 145 kWh per day over a billing period then de minimis applies and VAT is charged at the reduced rate (currently 5%).
Demand
The rate at which electric energy is used in any instant or average over a period of time. Usually expressed in kilowatts (kW) or kilovolt-amperes (kVA).
Distribution Network Operators (DNOs)
DNOs are ex-Public Electricity Suppliers that came into existence on 1 October 2001. There are currently 14 Distribution Network Operators (DNOs) in the UK.
Domestic Site
A site with an annual gas consumption of less than 73,200 kilowatt hours or 2,500 therms.
Firm Supply
A firm supply of gas is one that is guaranteed for a fixed period and will not be subject to an interruption or closure.
Forwards 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.
Gate closure
In relation to a settlement period, the time 3.5 hours before the start of that settlement period. It defines the moment when bilateral contracting ends and the Balancing Mechanism for each associated trading period begins.
Gigawatt
The equivalent to one thousand megawatts or one million kilowatts (kW).
Half-hourly Metering
Since April 1998, half-hourly meters have been mandatory for all sites over 100 kVA, and voluntary for sites under 100 kVA. This meter sends consumption data by telephone or radio every half-hour to a central data bank. The supplier will then access this information from the data bank and bill the user accordingly.
Imbalance
A situation where there is a difference between the amount of power produced (supply) and the amount of electricity contracted or sold (demand). At such times spare capacity in the system can be brought on stream, normally at a much higher cost than the contracted price.
Industrial & Commercial (I&C) site
A site with an annual gas consumption of more than 73,200 kilowatt hours or 2,500 therms.
Interconnector
A cable connection allowing electricity to flow between two countries or markets. There are interconnectors between the north of England and Scotland and between the south of England and France.
Interruptible Supply
An interruptible supply is one whereby an agreement has been reached with the user that the service may be interrupted throughout the year, for a pre-determined number of occasions and durations. This form of contract is cheaper and enables the supplier to be more flexible.
Kilovolt Amperes (kVA)
A measure of electrical load on a circuit or system. The units used to measure apparent electric power or €true power€. For billing purposes maximum demand measured in kilowatts (kW) is converted to €true power€ in kilovolt amperes (kVA) by dividing by the power factor. Maximum demand and capacity charges are billed using kVA rather than kW.
Kilowatt
A measure of electrical power. One kilowatt (kW) equals 1,000 watts.
Kilowatt Hour
A measure of electrical energy. One kilowatt hour (kWh) of energy is the energy produced by one kilowatt acting for one hour. Electricity meters record in kilowatt hours and electrical consumption is billed on kilowatt hours.
Kilowatt Hours
A measure of heat energy from gas. Gas suppliers now bill gas in kilowatt hours (kWh), as opposed to therms, so that a comparison can be drawn between gas services and electricity services. To calculate equivalent value in therms, divide by 29.3071.
Load Factor
Ratio of average energy demand (load) to maximum demand (peak load) during a specific period. Usually stated as a percentage, or number of hours used.
Maximum Demand (MD)
The measure of the highest peak of electricity flow into the site during a half-hour period, in the period of a month. Measured in either kW or kVA.
Megawatt
The equivalent to one thousand kilowatts.
MPA
Meter Point Administration Number - a 21 digit reference, used to uniquely identify the electricity supply point. Although the name suggests that an MPAN refers to a particular meter, an MPAN can have several meters associated with it.
MPR
Meter Point Reference. Each gas supply point is allocated a unique meter point reference or MPR number and these are held on a national database.
National Grid
The National Grid owns the main transmission systems and is responsible for transmitting the electricity from the generator to the local REC€s area.
Network
A distribution system in which the secondaries of the distribution transformers are connected to common conductors for supplying power directly to a customer's service.
Network Code
A document that lays out the rights and responsibilities of all those using a Public Gas Transporter (PGT) network. The Network Code is normally used to refer specifically to the PGT network.
Nominated Consumption
The expected consumption of gas over a twelve month period used in a supply agreement.
NTS (National Transmission System)
The pipeline network and supporting facilities that are used to transport gas around the UK.
Objection
A notice issued to a shipper who received an involuntary withdrawal indicating that they wish to retain responsibility for the supply point.
Offtake
Gas consumed by a site or customer.
Ofgem The Office of Gas and Electricity Markets
The industry regulator
PGT - Public Gas Transporter
A pipeline network operator, the largest of which used to be Transco, but is now National Grid.
Power Factor
The ratio of active or real power in kilowatts (kW), to apparent power in kilovolt amperes or kVA. Power Factor is normally expressed as a figure between zero and one. Unity power factor is 100% (or 1.0) power factor which is the highest available. In practice 0.99 is the highest.
Reactive Power Charges
Electricity that is deflected by electrical motors and is accounted for by the supplier by billing as a separate item. It is possible to install Power Factor Correction Equipment which will eliminate or reduce the reactive power charges.
REC
Regional Electricity Company. The UK is split into local electricity regions. Each REC is responsible for supply to domestic, commercial and industrial customers in its area.
Renewable sources of energy
Energy sources that occur naturally and repeatedly in the environment, e.g. from the sun, the wind and the oceans, and from plants and the fall of water. It also refers to the energy available from wastes and to the emerging clean technology of fuel cells.
Settlements Agency
This is the body that "settles" the distribution of electricity to establish where and to whom the generated load has been distributed to.
Settlements Charges
A charge applicable to half-hourly metered supplies. Effectively a standing charge that covers balancing and settlement.
Smart Meters
Any meter which allows for the identification of consumption in more detail than a conventional meter. Smart meters will generally also include a means of communicating information to a central data collection site for energy management and/or billing purposes.
Supply Point
A group of one or more meters for which the PGT shall make natural gas available for offset by the Shipper.
System Buy Price (SBP)
The price paid in the Balancing Mechanism by a party that requires more energy to meet its contractual commitments. Prices are often volatile and very high.
System Sell Price (SSP)
The price paid in the Balancing Mechanism by a party that has produced more electricity than it had users to buy. Prices are very volatile and often negative, meaning that a payment would need to be made to dispose of the unwanted electricity produced.
Therms
A therm is an imperial measure of heat energy equivalent to 29.3071 kilowatt hours. Therms have been largely replaced by kilowatt hours as the standard unit of measure on gas bills and supply agreements.
Transmission
The transfer of electricity at high voltage from power stations across the UK through wires on pylons to points where it can be distributed to users.
Transmission Losses
In transmitting electricity from generator to local REC area, some electricity is lost. Specific calculations have to be made by suppliers to determine the level of these losses.
Transportation Agreement
The agreement between an independent supplier of gas and the relevant PGT, for the movement of gas within the gas network.
Triad
The National Grid takes readings of maximum demands three times a year. The average of the three readings is used by the National Grid to calculate the transmission charges.
Voltage
The force that causes a current to move through some resistance, in this case, the National Grid. In industry terms, electricity moves round the main grid at a high voltage. When it is stepped down to the level of a smaller grid or an actual site it is regarded as low voltage. Low voltage supply is more expensive because of the costly process of stepping it down from high voltage. A number of larger industrial sites take high voltage direct which means they incur the cost of stepping the voltage down. For this, they subsequently receive more competitive pricing.
