ENERGY GLOSSARY
Energy
Glossary
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 |
|---|---|
| Assistance for Areas of High Electricity Distribution Cost (AAHEDC) | Costs recovered by the National Grid to subsidise the higher distribution network costs in remote areas such as North Scotland. Settled at GSP |
| Balancing Services Use of System (BSUoS) | Recovery of costs incurred by the National Grid for balancing supply and demand across the network. Settled at 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 consumption (working day consumption between 16:00 to 19:00 from November through to February inclusive). CM Operational costs reflect the costs of operating the scheme. Settled at 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. Settled at Meter |
| Commodity | Reflects the raw cost of the electricity that is typically purchased on the wholesale market. Settled at NBP |
| 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. Settled at NBP |
| Contracts for Difference (CfD) | The Government's main mechanism to support investment in new low carbon generation by guaranteeing the commodity price a generator will receive. Settled at NBP |
| 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. Settled at Meter |
| Data Aggregation (DA) | Charges for aggregation and submission of consumption data for industry settlement. |
| Data Collection (DC) | Charges for collection of consumption data. |
| Distribution Use of System (DUoS) | Charges set by the Distribution Network Operator (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. Settled at Meter |
| Feed-in Tariff (FiT) | Costs levied by Ofgem to fund the Feed In Tariff scheme to incentivise investment into small scale renewable generation. Settled at Meter |
| Meter Operator (MOP) | Charges for the provision, maintenance and operation of the meter. |
| Renewables 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. Settled at Meter |
| Transmission Network Use of Sytem (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. Settled at 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 |