Energy Glossary

Technical terms are commonplace in the Energy Industry. Use our glossary to understand more about Electricity charges, Gas charges and Industry Acronyms

Please contact us if you have a more technical query to discuss

Electricity Charges

The table below contains the electricity costs most commonly referenced and provides a brief description of each.

Charge Description Settlement level
Assistance for Areas of High Electricity Distribution Cost (AAHEDC) Costs recovered by the National Grid to subsidise the high distribution network costs in remote areas such as North Scotland. GSP
Balancing Services Use of System (BSUoS) Recovery of costs incurred by the National Grid for balancing supply and demand across the network. NBP
Capacity Mechanism (CM) Consists of 2 separate costs; Obligation Levy and Operational cost. The CM Obligation Levy reflects the costs of the auctions designed to secure Generation & DSR availability. Costs are recovered on peak winter. CM Operational costs reflect the costs of operating the scheme. NBP
Climate Change Levy (CCL) The Climate Change Levy is an environmental tax charged by HMRC on the energy used by businesses. It is designed to incentivise energy efficiency. Meter
Commodity Reflects the raw cost of the electricity that is typically purchased on the wholesale market. NBP
Commodity risk Costs such as Imbalance, Shape and Booking risk incurred by suppliers for the operational management of commodity from point of sale through to settlement. NBP
Contracts for Difference (CfD) The Governments main mechanism to support low-carbon electricity generation through the agreement of technology specific 'strike prices'. NBP
Credit risk Supplier risk based on probability of default; to protect against insolvent debt and mark-to-market exposure. Meter
Data Aggregation (DA) Charges for aggregation and submission of consumption data for industry settlement. N/A
Data Collection (DC) Charges for collection of consumption data. N/A
Distribution Use of System (DUoS) Charges set by the Distribution Network Owner (DNO) for the use and maintenance of the infrastructure required to distribute electricity locally to the customer meter. Costs vary by meter type, voltage and consumption. Meter
EII Support Levy (ESL) More correctly called the Network Charging Compensation Scheme (NCCS). The charge is collected via electricity invoices to recover 60% of network charging costs (TNUoS, BSUoS, DUoS) for Energy Intensive Industries (such as chemicals, plastics, mining, and cement). The scheme aims to ensure competitive energy costs for these industries. NBP
Feed-in Tariff (FIT) Costs levied by Ofgem to fund the Feed In Tariff scheme to incentivise investment into small scale renewable generation. The scheme is now closed. Meter
Meter Operator (MOP) Charges for maintenance and operation of the meter. N/A
Regulated Asset Based (RAB) A nuclear generation funding charge that aims to collect revenue from supply customers to provide developers with finance from the very start of construction. The idea is to make investment in new nuclear generation power stations more appealing and to ensure facilities are developed as existing assets begin the decommissioning process. Meter
Renewable Obligation (RO) The Renewables Obligation scheme was one of the Government's main mechanisms to support renewable generation through the issue of Renewable Obligation Certificates (ROCs). The scheme closed to new generators in 2017 but will continue to support accredited parties until 2037. Meter
Transmission Network Use of System (TNUoS) Charges set by National Grid for the use and maintenance of the infrastructure required to transmit electricity nationally from point of generation to each of the Distribution Networks. GSP

Gas Charges

The table below contains the gas costs most commonly referenced and provides a brief description of each.

Charge Description
Commodity Reflects the raw cost of the gas that is purchased on the wholesale market.
Commodity risks Costs such as Imbalance, Shape and Booking risk incurred by suppliers for the management of commodity and volume variations from point of sale through to outturn.
Credit risk Supplier risk based on the probability of customer default. Suppliers may charge credit risk to protect against insolvent debt and mark-to-market exposure.
Gas transportation - LDZ Charges for the use and maintenance of the infrastructure required to transport gas locally through Local Distribution Zones (LDZs).
Gas transportation - NTS Charges for the use and maintenance of the infrastructure required to transport gas nationally through the National Transmission System (NTS).
Green Gas Levy (GGL) New charge from 1st December 2021 to fund the Green Gas Support Scheme (GGSS). The GGSS is the Government's environmental scheme to incentivise biomethane gas production to increase the availability of green gas across the network.
Meter Asset Charges (MAC) Costs associated with the provision, maintenance and operation of the meter.
Meter Read Costs for daily, monthly or quarterly reads.
Swing Swing costs reflect the impact of short term factors (primarily weather) on forecast customer demand.
Unidentified Gas (UiG) Charges to recover the cost of Gas commodity that cannot be attributed to an end user.

Energy Acronyms

The table below contains an explanation of the acronyms often used within the industry

Acronym Description
ALP Annual Load Profile
BSUoS Balancing Services Use of System
CCL Climate Change Levy
CfD Contracts for Difference
CM Capacity Mechanism
CoP Code of Practise
CWV Composite Weather Variable
DA Data Aggregator
DAF Daily Adjustment Factor
DC Data Collector
DECC Department of Energy & Climate Change
DM Daily Metered
DNO Distribution Network Operator
DSR Demand Side Response
DUoS Distribution Use of System
EUC End User Category
EZ Exit Zone
FiT Feed-in Tariff
GSP Grid Supply Point
HH Half Hourly
IDNO Independent Distribution Network Operator
LDZ Local Distribution Zone
MAC Meter Asset Charge
MOP Meter Operator
NBP Notional Balancing Point
NDM Non-Daily Metered
NHH Non-Half Hourly
PC Profile Class
RO Renewable Obligation