Business Energy Sector Jargon
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Business energy comes with terminology covering everything from the amount of energy you use to the way electricity reaches your premises. Understanding these terms can make it easier to read your business energy bills, review energy contracts and compare suppliers.
The glossary below focuses on the terminology most relevant to businesses managing gas and electricity.
Core business energy terminology
- Annual Consumption (AC)
- Annual Quantity (AQ)
- Kilowatt-hour (kWh)
- Megawatt-hour (MWh)
- Gigawatt-hour (GWh)
- Unit rate
- Standing charge
- Ofgem Energy Price Cap
- Non-commodity charges
Business energy contract terminology
- Fixed contracts
- Pass-through contracts
- Flexible purchasing
- Deemed rates
- Out-of-contract rates
- Change of Supplier (CoS)
- Central Switching Service (CSS)
- Letter of Authority (LoA)
- Take or pay
Metering and supply terminology
- MPAN
- MPRN
- Meter serial number
- Smart meter
- AMR meter
- Half-hourly meter
- Half-hourly data
- Meter Operator (MOP)
- P272
- Sub-metering
Consumption, capacity and demand terminology
- Agreed Capacity
- Capacity charges
- Maximum Demand
- Base load
- Load shape
- Load management
- Peak demand
- Power factor
- Reactive power
- Business energy audits
- Energy performance certificate
Electricity network terminology
- Distribution Network Operator (DNO)
- Distribution System Operator (DSO)
- Independent Distribution Network Operator (IDNO)
- DUoS charges
- TNUoS charges
- BSUoS charges
- Distribution losses
- Smart grid
- Transmission losses
Gas network and market terminology
- National Balancing Point (NBP)
- National Transmission System (NTS)
- Gas Transporter
- Independent Gas Transporter (IGT)
- Transportation charge
- Calorific Value (CV)
- Local Distribution Zone (LDZ)
Market-wide Half-Hourly Settlement terminology
- Market-wide Half-Hourly Settlement (MHHS)
- Settlement
- Advanced Data Service (ADS)
- Smart Data Service (SDS)
- Metering Service
Business energy taxes and levies
- Climate Change Levy (CCL)
- Climate Change Agreement (CCA)
- Value Added Tax (VAT)
- Qualifying use
Renewable energy and carbon terminology
- Renewable tariffs
- Renewable energy
- Renewable Energy Guarantee of Origin (REGO)
- Fuel Mix Disclosure
- Carbon footprint
- Carbon intensity
- CO2e
- Combined Heat and Power (CHP)
- Intermittency
- Curtailment
- Capacity Factor
Core business energy terminology
Annual Consumption (AC)
Annual Consumption is the estimated amount of electricity a supply point is expected to use over a year. It is usually based on previous usage data and gives suppliers an indication of a site's typical electricity demand. AC can be used when assessing a business's electricity requirements, comparing tariffs and preparing energy quotes.
Annual Quantity (AQ)
Annual Quantity is an estimate of how much gas a supply point is expected to use over a year. It is generally calculated using historical consumption information and helps suppliers understand a site's typical gas demand. AQ can also be used when preparing business gas quotes and assessing whether a tariff is suitable for the site's expected usage.
Kilowatt-hour (kWh)
A kilowatt-hour is the standard unit used to measure energy consumption. Business gas and electricity bills will normally show how many kWh have been used during the billing period, making it one of the main figures used to track and compare energy consumption.
For businesses, kWh can be used to monitor usage over time, compare different sites and understand how changes in operations may affect overall energy demand.
Megawatt-hour (MWh)
A megawatt-hour is a larger unit of energy equal to 1,000 kWh. It is commonly used when discussing higher levels of energy consumption, particularly for large or energy-intensive businesses such as manufacturers.
MWh is also widely used by energy suppliers, generators and within wholesale energy markets because it makes large volumes of electricity or gas easier to measure and compare.
Gigawatt-hour (GWh)
A gigawatt-hour (GWh) is a unit of energy used to measure very large amounts of electricity consumed or generated over time. One GWh is equal to 1,000 megawatt-hours (MWh).
GWh is commonly used by energy suppliers, generators, network operators and large energy-intensive businesses, including manufacturers, when reporting annual electricity consumption or comparing usage across large sites.
For example, a manufacturing business operating heavy machinery, production lines, furnaces, refrigeration or other energy-intensive equipment may measure its yearly electricity use in GWh rather than kWh because the figures are easier to interpret at that scale.
A gigawatt (GW), by contrast, is a unit of power that measures the rate at which electricity is being generated or used at a particular moment. It is more commonly used to describe the capacity or output of power stations, wind farms, solar farms and the wider electricity system.
Unit rate
The unit rate is the amount your business pays for each unit of gas or electricity consumed. It is normally shown in pence per kilowatt-hour (kWh) on a business energy bill and forms a significant part of the overall cost of your energy supply.
Unit rates can vary depending on factors such as your energy supplier, contract type, usage profile, meter type, contract length and wider market conditions. The unit rate is important when comparing business energy contracts, but it shouldn't be considered in isolation. Standing charges, network costs and other charges can also affect the total amount your business pays.
Standing charge
A standing charge is a fixed amount charged for your energy supply, regardless of how much gas or electricity your business uses. It is usually applied as a daily charge and appears separately from your unit rate on your business energy bill.
The standing charge contributes towards costs associated with maintaining the energy network, metering, administration and keeping your premises connected to the supply. When comparing business energy contracts, it is important to consider both the standing charge and unit rate, as a lower unit rate does not always result in a lower overall bill.
Ofgem Energy Price Cap
The Energy Price Cap is set by Ofgem and limits the unit rates and standing charges suppliers can charge eligible domestic customers on certain variable tariffs. Ofgem reviews the cap every three months, with changes reflecting factors such as wholesale energy costs and other costs involved in supplying energy.
The cap doesn’t apply to business energy contracts. Businesses agree gas and electricity prices separately with their supplier, so the rates available can vary according to factors such as energy usage, contract type, meter type, contract length and wider market conditions.
Non-commodity charges
Non-commodity charges are energy costs that sit outside the wholesale cost of gas or electricity.
They can include network charges, balancing costs, environmental levies and other regulated industry costs. These charges can make up a significant part of a business energy bill, particularly for larger energy users.
Business energy contract terminology
Fixed contracts
Fixed contracts, also known as fixed tariffs or fixed-rate tariffs, lock in agreed energy rates for a set period, often 12 to 24 months. A fixed business energy contract can fix some or all energy costs for the duration of the agreement, helping protect your business from short-term market price changes.
Fixed tariffs can provide greater cost certainty and make budgeting easier. They may also be more competitive than standard variable tariffs, depending on market conditions when the contract is agreed.
However, businesses should review the full contract structure carefully to understand exactly which charges are fixed. Some third-party or non-commodity charges may still vary. You may also incur exit fees if you switch before the contract ends.
Pass-through contracts
A pass-through energy contract separates certain third-party costs from the fixed elements of the agreement.
Charges such as network, balancing or policy costs may be passed through to the business as they change. This means the total amount paid can vary during the contract term even where the wholesale energy element has already been agreed.
Flexible purchasing
Flexible purchasing allows a business to buy its energy in stages rather than fixing its entire expected consumption at one point in time.
This approach is generally more relevant to larger energy users. It can allow businesses to respond to movements in the wholesale energy market, although it also requires closer management and a greater tolerance for price risk.
Deemed rates
Deemed rates normally apply when a business uses gas or electricity without having agreed an energy contract with the existing supplier.
This often happens when a business moves into new premises. Deemed rates can be higher than rates available through an agreed business energy contract, so it is important to review your supply when taking over a new site.
Out-of-contract rates
Out-of-contract rates may apply when an existing business energy contract reaches its end date without a new agreement being put in place.
These rates can be higher than contracted business energy rates. Reviewing your options before your contract expires can help you avoid unnecessary time on out-of-contract pricing.
Change of Supplier (CoS)
Change of Supplier is the industry process through which a business's gas or electricity supply moves from one energy supplier to another.
The physical supply normally continues without interruption because switching supplier does not require gas or electricity to stop reaching the premises.
Central Switching Service (CSS)
The Central Switching Service is the central industry system used to support gas and electricity supplier switching.
It helps suppliers manage processes such as registering a switch and dealing with objections to a proposed change of supplier.
Letter of Authority (LoA)
A Letter of Authority gives an energy consultant permission to contact suppliers and access certain account information on behalf of a business.
For example, an LoA may allow Business Utility Hub to obtain consumption data, contract information or supply details needed to review and compare business energy options.
An LoA does not automatically give authority to enter into a new energy contract unless this is specifically included within the document.
Take or pay
Take or pay is a contractual arrangement sometimes used for larger business gas supplies.
The customer agrees to pay for a minimum quantity of gas over an agreed period, even if actual consumption falls below that amount.
Metering and supply terminology
falls. This can help identify operating patterns and periods of unusually high consumption.
Meter Operator (MOP)
A Meter Operator, usually shortened to MOP, is responsible for installing, maintaining and managing certain business electricity meters.
Businesses with half-hourly electricity supplies may have a separate Meter Operator agreement alongside their electricity supply contract.
P272
P272 was an electricity industry change that required certain larger non-half-hourly meters to move to half-hourly settlement.
It mainly affected electricity supplies in Profile Classes 05 to 08 and increased the use of half-hourly consumption data for business customers.
P272 is now primarily a legacy industry term, with Market-wide Half-Hourly Settlement becoming the more relevant programme for the wider electricity market.
Sub-metering
Sub-metering involves installing additional meters to measure the consumption of particular areas, processes or pieces of equipment within a business.
For example, a manufacturer could use sub-metering to separately monitor the electricity consumed by a particular production line.
Consumption, capacity and demand terminology
Agreed Capacity
Agreed Capacity also known as Available Supply Capacity, is the maximum level of electrical capacity agreed for a site with its Distribution Network Operator.
It represents the level of electrical demand the site’s network connection has been set up to support. This is particularly important for larger businesses, where machinery, heating, cooling or other high-demand equipment can place significant pressure on the connection.
Businesses should make sure their Agreed Capacity reflects how the site actually operates. Too little capacity can create problems if demand regularly exceeds the agreed level, while too much may mean paying for capacity the business does not need.
Capacity charges
Capacity charges relate to the amount of electrical capacity reserved for a business through its network connection.
They are most relevant to larger electricity users with significant demand, such as manufacturers, warehouses and other energy-intensive sites. The charge helps cover the cost of making enough network capacity available to meet the business’s requirements.
A business that reserves more capacity than it needs may pay unnecessary costs, while exceeding the agreed capacity can also result in additional charges. Reviewing capacity requirements can therefore form an important part of managing electricity costs.
Maximum Demand
Maximum Demand is the highest level of electrical demand recorded by a site during a specified period.
Rather than measuring total electricity consumption, it shows how much power the business requires at its busiest point. This can be particularly important for manufacturers and other businesses operating energy-intensive equipment.
For example, running several production lines, motors, compressors and cooling systems at the same time may create a much higher Maximum Demand than operating the same equipment at different times.
Base load
Base load is the minimum amount of electricity a business continues to require during its lowest-demand periods.
It represents the electricity used by equipment and systems that remain operational even when the business is quiet or closed.
A care home operating around the clock, for example, may maintain a substantial base load because heating systems, refrigeration, lighting, medical equipment and safety systems continue to operate overnight. Understanding base load can help identify where energy is being used continuously.
Load shape
Load shape describes the pattern of a business’s electricity consumption over a period of time.
It shows when demand rises, falls and reaches its highest points. For example, a manufacturing site may see electricity demand increase when production starts, remain high through operating hours and fall significantly overnight.
Understanding load shape gives businesses and energy suppliers a clearer picture of how electricity is actually being used. Two businesses with similar annual consumption can have very different load shapes and therefore different energy requirements.
Load management
Load management means changing when or how electrical equipment operates to better manage electricity demand.
Where operationally practical, a business may stagger the use of energy-intensive machinery rather than switching everything on at once. Some processes may also be moved away from periods when site demand is already particularly high.
Effective load management can help reduce demand peaks, make better use of available capacity and support more efficient energy use without necessarily reducing overall production.
Peak demand
Peak demand is the point when a business’s electricity demand reaches its highest level.
This often occurs when several high-demand systems or pieces of equipment are operating at the same time. For example, machinery, heating, refrigeration, ventilation and compressed air systems may combine to create a significant demand peak at a manufacturing site.
Monitoring peak demand can help businesses understand when the greatest pressure is being placed on their electricity supply and identify opportunities to manage demand more effectively.
Power factor
Power factor measures how effectively the electricity supplied to a site is being converted into useful power.
A power factor closer to its optimum level generally indicates that electricity is being used more efficiently. Poor power factor can be particularly relevant to industrial businesses using motors, compressors, pumps and other large electrical equipment.
Where power factor is poor, more electricity may need to flow through the network to deliver the same useful output. This can increase demand on the electrical system and, in some cases, contribute to additional charges.
Reactive power
Reactive power is electricity that moves through an electrical system but does not directly perform useful work.
It is often associated with equipment such as motors, transformers and compressors, which require reactive power to create magnetic fields and operate correctly.
While some reactive power is necessary, high levels can reduce the efficiency of a site’s electrical system and place additional demand on the network. Larger businesses may therefore see reactive power recorded separately on their electricity bills and could face additional charges where usage is excessive.
Business energy audits
A business energy audit is a structured review of how and where a business uses energy.
They identify areas of energy waste in operations. Audits assess buildings, equipment and operational practices, including heating, lighting, machinery, refrigeration and other day-to-day energy use. The aim is to identify where energy may be being wasted and highlight opportunities to improve energy efficiency.
An energy audit can also help a business understand whether changes in its operations, equipment or working patterns have affected its overall energy requirements. The findings can then support more efficient processes, lower unnecessary consumption and help develop sustainable energy practices.
Energy performance certificate
An Energy Performance Certificate (EPC) assesses the energy efficiency of a building and gives it a rating from A, the most energy efficient, to G, the least energy efficient.
The certificate considers factors such as heating, lighting, insulation and the building’s construction. It can also include recommendations for measures that could improve the property’s energy performance.
For businesses, an EPC can help identify how efficiently a commercial premises operates and where improvements could potentially reduce energy consumption. EPC requirements can also apply when commercial properties are built, sold or rented, subject to certain exemptions.
Find out more about what factors an EPC certification incorporates.
Electricity network terminology
Distribution Network Operator (DNO)
A Distribution Network Operator is responsible for operating, maintaining and upgrading the regional electricity distribution network.
The DNO manages the infrastructure that carries electricity from the high-voltage transmission system through local cables, substations and other network equipment to businesses and other properties.
A DNO is different from your electricity supplier. Your supplier bills you for the electricity you use, while the DNO is responsible for the physical network that delivers that electricity to your premises.
Distribution System Operator (DSO)
A Distribution System Operator manages the electricity distribution network with a greater focus on actively balancing local electricity generation, consumption and available network capacity.
This role is becoming more important as more renewable generation, battery storage, electric vehicles and other flexible technologies connect to local networks. DSOs help manage these changes so electricity can continue to move through the network efficiently and reliably.
Independent Distribution Network Operator (IDNO)
An Independent Distribution Network Operator is a licensed company that owns or operates a local electricity distribution network independently of the main regional DNO.
IDNO networks are often found on newer commercial developments, business parks or other sites where part of the local electricity infrastructure has been built and managed separately from the main regional network.
Businesses connected to an IDNO still receive electricity in the usual way, but the organisation responsible for part of their local network may be different from the regional DNO.
DUoS charges
DUoS stands for Distribution Use of System. These charges contribute towards the cost of using, maintaining and developing local electricity distribution networks. They help cover the infrastructure required to move electricity from the wider transmission system to individual business premises.
DUoS charges form part of the wider cost of delivering electricity and can vary depending on factors such as the location of the site, its connection and how electricity is used.
TNUoS charges
TNUoS stands for Transmission Network Use of System. These charges contribute towards the cost of operating, maintaining and developing Britain’s high-voltage electricity transmission network.
The transmission system moves large quantities of electricity from generators across the country before it reaches regional distribution networks. TNUoS charges therefore help fund the infrastructure needed to keep this national system operating.
For larger businesses, transmission-related costs can form part of the non-commodity charges included within the overall cost of electricity.
BSUoS charges
BSUoS stands for Balancing Services Use of System. These charges relate to the cost of balancing electricity generation and demand across the national electricity system.
Electricity supply and demand have to remain closely matched. When generation is too high or too low, the system operator may need to take action to maintain a stable electricity network. BSUoS charges help recover the costs associated with carrying out this balancing activity.
Distribution losses
Distribution losses refer to electricity lost while travelling through local distribution networks. Not all electricity entering the network reaches the end user because some energy is naturally lost as electricity passes through cables, transformers and other infrastructure.
The amount lost can vary depending on factors such as the distance electricity travels, the voltage level and the type of network infrastructure being used. These losses form part of the wider cost of supplying electricity to businesses
Smart grid
A smart grid uses digital technology to monitor and manage how electricity is generated, transported and used across the network.
It can collect and respond to real-time data from different energy sources, including traditional power stations and renewable generation such as wind and solar. This helps network operators balance electricity supply and demand more efficiently, manage changes in generation and support a more flexible energy system..
Transmission losses
Transmission losses are electricity losses that occur while electricity travels through the high-voltage transmission network. Even at high voltages, some energy is lost as electricity moves over long distances between generators, substations and regional distribution networks.
These losses are part of the overall cost of transporting electricity across Britain and can contribute to the non-commodity costs included within business electricity pricing.
Gas network and market terminology
National Balancing Point (NBP)
The National Balancing Point is the virtual trading point used for wholesale gas trading in Great Britain.
When market reports discuss movements in UK wholesale gas prices, NBP pricing is commonly used as an important market reference.
National Transmission System (NTS)
The National Transmission System is the high-pressure gas network used to transport large volumes of gas around Great Britain.
Gas Transporter
A Gas Transporter is a licensed organisation responsible for operating and maintaining part of Britain's gas network.
Its role is separate from the energy supplier that sells gas to the business.
Independent Gas Transporter (IGT)
An Independent Gas Transporter operates a local gas network independently of the main regional gas network operator.
Transportation charge
Transportation charges relate to the cost of moving gas through transmission and distribution networks to a customer's premises.
Calorific Value (CV)
Calorific Value measures how much energy is contained within gas.
Gas meters generally measure the volume of gas used, but businesses are billed according to the amount of energy consumed. Calorific Value forms part of the calculation used to convert gas volume into kWh.
Local Distribution Zone (LDZ)
A Local Distribution Zone is a defined regional section of Britain's gas distribution network.
Market-wide Half-Hourly Settlement terminology
Market-wide Half-Hourly Settlement (MHHS)
Market-wide Half-Hourly Settlement is an electricity industry programme designed to use more detailed half-hourly consumption data when settling electricity usage.
The change is intended to provide a more accurate picture of when electricity is consumed and support a more flexible electricity market.
Settlement
Settlement is the industry process used to work out how much electricity customers have consumed and reconcile that consumption with the electricity supplied to the network.
Advanced Data Service (ADS)
The Advanced Data Service is responsible for obtaining and processing consumption information from electricity meters within the Advanced Market Segment.
Smart Data Service (SDS)
The Smart Data Service is responsible for collecting and validating consumption information from meters within the Smart Market Segment.
Metering Service
The Metering Service covers the installation, maintenance and management of electricity metering equipment under the MHHS framework.
Business energy taxes and levies
Climate Change Levy (CCL)
The Climate Change Levy is an environmental tax applied to much of the gas and electricity used by businesses and other non-domestic organisations.
It appears separately on many business energy bills. Some businesses and types of energy use may qualify for exemptions or reduced rates.
Climate Change Agreement (CCA)
A Climate Change Agreement is an arrangement available to eligible energy-intensive businesses.
Businesses participating in a CCA agree to meet specified energy-efficiency or carbon reduction targets. In return, they can qualify for a reduction in the Climate Change Levy they pay.
Value Added Tax (VAT)
VAT is applied to business gas and electricity.
Most business energy consumption is subject to the standard rate of VAT, although a reduced rate can apply in certain qualifying circumstances.
Qualifying use
Qualifying use describes energy consumption that meets specific conditions for reduced VAT treatment.
This can include certain domestic or charitable non-business energy use.
Renewable energy and carbon terminology
Renewable tariffs
A renewable energy tariff is a business energy tariff where some or all of the electricity supplied is matched with electricity generated from renewable sources.
Suppliers may use Renewable Energy Guarantees of Origin to provide evidence of the renewable electricity associated with the tariff.
Renewable energy
Renewable energy comes from sources that naturally replenish, including wind, solar, hydro and tidal energy.
Businesses may consider renewable electricity options as part of their energy procurement or wider carbon reduction strategy.
Renewable Energy Guarantee of Origin (REGO)
A Renewable Energy Guarantee of Origin certificate provides evidence that a quantity of electricity has been generated from a renewable source.
REGOs are used within the UK electricity market to demonstrate the renewable origin of electricity.
Fuel Mix Disclosure
Fuel Mix Disclosure shows the different sources used to generate the electricity supplied by an energy supplier.
It may include renewable energy, natural gas, nuclear energy and other sources.
Carbon footprint
A carbon footprint is the total greenhouse gas emissions associated with a business, organisation, activity, product or other defined area.
Carbon intensity
Carbon intensity measures the amount of carbon emissions associated with producing a particular amount of energy.
CO2e
CO2e stands for carbon dioxide equivalent.
Different greenhouse gases have different impacts on the climate. CO2e converts their effects into a common measurement so emissions can be compared and reported together.
Combined Heat and Power (CHP)
Combined Heat and Power is a system that generates electricity while capturing heat produced during the process and putting it to useful purposes.
The recovered heat can be used for space heating, hot water or industrial processes, allowing businesses to make more effective use of the fuel consumed.
Intermittency
Intermittency refers to the variability in electricity generation from renewable sources such as wind and solar.
Unlike some other forms of generation, wind and solar output depends on weather conditions. This means the amount of electricity they generate can rise or fall depending on factors such as wind speed, cloud cover and daylight.
Understanding intermittency is important because the wider electricity system must continue balancing supply and demand as renewable generation changes.
Curtailment
Curtailment is the intentional reduction of electricity output from a generator, even when it is capable of producing more power.
For renewable energy, curtailment can happen when the electricity network cannot accommodate all the available generation or when there is more electricity being produced than the system needs at that time.
It is particularly relevant to wind and solar generation and can affect how much renewable electricity is ultimately delivered to the grid.
Capacity Factor
Capacity Factor is the ratio of actual electrical energy output to maximum possible output. It is commonly used to assess and compare the performance of different types of electricity generation, including wind and solar.
For example, a wind farm may have a high maximum generating capacity, but its actual output will vary depending on wind conditions. Capacity Factor therefore provides a clearer indication of how much electricity a generator produces in practice.
How Business Utility Hub can help
Business energy terminology can be complex, but understanding your business energy contract, energy consumption and charges can make it easier to control costs, plan ahead and make more informed procurement decisions.
Business Utility Hub works with businesses to review their current energy position, understand how their gas and electricity are being used and compare business energy contracts across a trusted network of UK suppliers. Our business energy specialists explain the details clearly, so you can see how different tariffs, contract structures and charges could affect your overall energy spend.
We can help with:
- Energy procurement: reviewing your current business energy contract, electricity contract, gas agreement, usage profile and renewal dates before comparing suitable procurement options.
- Business energy supplier comparison: comparing gas and electricity tariffs across our supplier network to identify competitive business energy deals based on your usage, contract position and operational needs.
- Contract strategy: explaining fixed, flexible and pass-through business energy contracts, helping you understand the balance between price certainty, market exposure and long-term cost control.
- Usage and metering: helping you make sense of MPANs, MPRNs, half-hourly data, capacity, consumption profiles and other metering information that can influence business electricity and gas costs.
- Renewable energy options: reviewing renewable business energy tariffs and explaining how they may support your wider procurement, sustainability and carbon reduction strategy.
- Renewal planning: helping you review your business energy contract before it expires, compare rates early and reduce the risk of moving onto costly out-of-contract or deemed rates.
- Ongoing account support: giving you a dedicated account manager who understands your sites, usage, suppliers and contract dates, so you have a consistent point of contact throughout your business energy journey.
We check business energy prices every day, monitor market movements and translate complex industry terminology into clear, practical advice. Once you choose a suitable business energy contract, we can also manage the switching process from start to finish.
How Business Utility Hub can help
If you want to review your current gas or electricity contract, compare business energy suppliers or discuss your next renewal with our business energy specialists, call 0800 781 2700 or email savings@businessutilityhub.co.uk.