Let’s be honest energy bills are confusing enough without having to decode what half the words on them actually mean. Standing charges, calorific values, half-hourly metering, deemed contracts… it can feel like suppliers are speaking a completely different language.
Whether you’ve just moved into your first home, you’re trying to make sense of your business energy contract, or you’re looking into solar panels and heat pumps for the first time, this guide is here to help. We’ve put together one of the most thorough energy glossary which includes useful energy jargon terms to help you understand how everything works
We’ve broken it down into sections so you can jump straight to what you need. If you’re after a specific term, use Ctrl+F on desktop or the search function on your phone to find it quickly.
Why Energy Jargon Matters
Before we get into the glossary itself, it’s worth spending a moment on why all this terminology actually matters.
Energy is expensive. According to Ofgem, the price cap for a typical household using both gas and electricity sat at over £1,700 per year heading into 2026 and that’s for average consumption. Understanding your tariff, your contract, and your meter type can genuinely save you hundreds of pounds a year. It affects the decisions you make when switching suppliers, when looking at renewable heating systems, and when reviewing your business energy contract at renewal time.
On top of that, the energy sector is going through enormous change right now. The UK government’s push toward net zero by 2050, the growth of electric vehicles, the rollout of heat pumps under schemes like the Boiler Upgrade Scheme, and the increasing complexity of smart metering all of this generates a tidal wave of new terminology that even seasoned energy users struggle to keep up with.
Billing and Tariff Terms
These are the terms you’re most likely to encounter on your energy bills and when comparing tariffs. Getting a handle on these can immediately help you make better decisions about your energy supply.
Standing Charge
The standing charge is a fixed daily fee you pay your energy supplier regardless of how much energy you actually use. It covers the cost of keeping you connected to the gas or electricity network things like maintaining the pipework and cables, meter reading infrastructure, and the supplier’s administrative costs.
Standing charges are quoted in pence per day and vary between suppliers and tariff types. Some tariffs advertise a zero standing charge, but these often come with higher unit rates to compensate. It’s important to look at the full picture when comparing deals — a low unit rate with a high standing charge might actually cost you more than the reverse, depending on your usage. Citizens Advice has a useful breakdown of how to read your energy bill if you’re unsure what you’re looking at.
Unit Rate
The unit rate is the amount you pay per kilowatt-hour (kWh) of energy you use. This is the variable part of your bill the more energy you use, the more you pay at the unit rate. It’s usually expressed in pence per kWh.
When comparing tariffs, the unit rate is the headline number most people focus on, but as mentioned above, you need to look at it alongside the standing charge to get a true picture of the total cost.
Fixed Rate Tariff
A fixed rate tariff locks in your unit rate and standing charge for a set period typically one to three years. The big advantage is predictability: you know exactly what you’ll be paying per unit of energy throughout the contract term, regardless of what happens to wholesale energy prices in the meantime.
Fixed rate tariffs tend to be slightly more expensive than the standard variable rate at the time you sign up, because you’re essentially paying a premium for that price certainty. But if prices rise significantly during your fixed period as they did dramatically in 2021 and 2022 you could end up saving a considerable amount.
Variable Rate Tariff (Standard Variable Tariff / SVT)
The standard variable tariff is the default tariff you’ll be placed on if you don’t actively choose a deal. It goes up and down with market conditions, but in the UK it’s capped by Ofgem’s price cap, which limits how much suppliers can charge per unit of energy and per day for standing charges.
If you’ve never switched energy supplier or tariff, there’s a good chance you’re on the SVT right now. It’s not always the most expensive option particularly when fixed rates are priced above the cap but it’s worth checking.
Capped Tariff
A capped tariff guarantees that your energy prices won’t exceed a certain level during the contract period, but unlike a fixed rate, they can fall if wholesale prices drop. They tend to be priced higher than fixed rate tariffs at the outset but offer a degree of downside protection alongside some upside potential.
Dual Fuel Tariff
A dual fuel tariff simply means you get both your gas and electricity from the same supplier under a single contract. Suppliers often offer a discount for this arrangement, and it simplifies things one bill, one direct debit, one point of contact. It’s worth comparing dual fuel deals against separate gas and electricity contracts, though, as the savings aren’t always guaranteed.
Economy 7 Tariff
Economy 7 is an electricity tariff that charges you two different unit rates: a lower rate for seven hours overnight (typically between midnight and 7am, though the exact hours vary) and a higher rate during the day. It was designed for households with storage heaters and hot water cylinders that can be charged up overnight when demand and therefore price is lower.
If you have an Economy 7 meter, it’s worth checking whether you’re actually making the most of the cheaper overnight rate. Running dishwashers, washing machines, and tumble dryers overnight can help, but the higher daytime rate means Economy 7 can actually cost you more if your overnight consumption isn’t significant.
Price Cap
The energy price cap is set by Ofgem and limits the maximum amount suppliers can charge domestic customers per unit of electricity and gas, as well as for standing charges. It was introduced in January 2019 and became a household name during the energy crisis of 2021-2022, when Ofgem updated it quarterly rather than twice yearly to keep pace with soaring wholesale prices.
It’s important to understand that the price cap is not a cap on your total bill it’s a cap on the rate. If you use more energy than the average household, you’ll pay more even with the cap in place.
Deemed Contract
If you move into a new property or take over business premises without setting up a supply agreement, you’ll automatically be placed on a deemed contract by the existing supplier. Deemed contracts typically carry higher rates than negotiated tariffs and don’t require a signed agreement to be legally binding. The moment you start using energy at a property, a deemed contract kicks in.
Getting off a deemed contract quickly by either negotiating a formal agreement with the existing supplier or switching to a new one — is generally recommended.
Metering and Measurement Terms
Understanding how your energy is measured and billed is just as important as understanding your tariff.
Kilowatt-Hour (kWh)
The kilowatt-hour is the standard unit of energy used on your electricity and gas bills. One kWh is the energy consumed when a one-kilowatt appliance runs for one hour so a 1,000-watt electric heater running for one hour uses 1 kWh.
To put it in context: a typical UK home uses around 3,500 kWh of electricity per year and around 12,000 kWh of gas, though this varies enormously depending on the size of the property, number of occupants, and how well insulated it is.
Understanding kWh helps you calculate the cost of running individual appliances and compare energy use across different technologies — for instance, comparing the running costs of a gas boiler against an air source heat pump.
Watt, Kilowatt, Megawatt, Gigawatt
These are units of power the rate at which energy is consumed or generated.
- Watt (W): The basic unit of power. A standard light bulb might be 10W, a phone charger around 5W.
- Kilowatt (kW): 1,000 watts. Most appliances are measured in kilowatts a kettle is typically 2-3 kW.
- Megawatt (MW): 1,000 kilowatts. Used to describe the output of power stations and large-scale renewable energy installations.
- Gigawatt (GW): 1,000 megawatts. Used to describe national electricity generating capacity.
Power (watts/kilowatts) tells you how much energy something uses at any given moment, while energy (kWh) tells you the total amount consumed over time.
Smart Meter
A smart meter is a modern gas and/or electricity meter that automatically sends readings to your supplier, eliminating the need for manual readings or estimated bills. They come with an in-home display (IHD) that shows your real-time energy usage and cost.
The UK government has been rolling out smart meters since 2011, and the rollout is ongoing. You can contact your supplier to request one if you don’t already have one installation is free. Smart Energy GB has plenty of helpful information about how they work.
There are two generations of smart meter: SMETS1 (first generation) and SMETS2 (second generation). SMETS1 meters can sometimes lose their “smart” functionality if you switch suppliers, whereas SMETS2 meters are designed to work across different suppliers.
Half-Hourly Meter (HH Meter)
Half-hourly meters record electricity consumption every 30 minutes and transmit this data automatically to the supplier and to National Grid. They’re primarily used by larger business and industrial users, and are mandatory for sites consuming above certain thresholds.
The data from half-hourly meters is used to set the charges businesses pay based on when they consume electricity consuming during peak periods is typically more expensive. Understanding your half-hourly data is a key part of managing business energy costs.
AMR (Automated Meter Reading)
AMR refers to any system that collects meter readings automatically without the need for a physical visit. Smart meters are a form of AMR, but the term is most commonly used in the business energy world to refer to meters that transmit consumption data remotely, often every 30 minutes.
AMR removes the risk of estimated bills and gives businesses much more granular data about their energy consumption patterns.
MPAN (Meter Point Administration Number)
The MPAN — sometimes called the “supply number” is a 21-digit reference number that uniquely identifies your electricity supply point. You’ll find it on your electricity bill, usually in a box format. It’s not unique to your meter; it’s unique to the supply point at your property, which means it stays the same even if the meter is replaced.
When switching electricity suppliers, you’ll need to provide your MPAN.
MPRN (Meter Point Reference Number)
The gas equivalent of the MPAN. Your MPRN is an 11-digit number that identifies your gas supply point. Like the MPAN, it stays the same regardless of which supplier you’re with or if your meter is replaced.
Calorific Value (CV)
The calorific value is a measure of the energy content of gas specifically, how much heat energy is produced when a given volume of gas is burned. It’s measured in megajoules per cubic metre (MJ/m³) and varies slightly depending on the composition of the gas being supplied.
Gas meters measure the volume of gas you use in cubic metres, but because the energy content of gas can vary, suppliers apply the calorific value to convert your volume reading into kWh for billing purposes. This is why your gas bill shows a “conversion factor” it’s accounting for the calorific value of the gas supplied to your area. It’s a legal requirement for suppliers to include the CV on gas invoices.
Meter Point Administration (MPA)
The administrative system used to register and manage electricity supply points across the UK. It tracks MPAN numbers, associated metering details, and supply data across the national network.
Energy Infrastructure and Network Terms
The UK’s energy system is complex, and understanding the infrastructure that gets energy from where it’s generated to your home or business helps make sense of the various charges that appear on your bill.
Distribution Network Operator (DNO)
DNOs are the companies responsible for operating the local electricity distribution networks the cables and substations that carry electricity from the high-voltage transmission network to homes and businesses. There are six licensed DNOs in Great Britain, each covering a different geographical region.
You don’t choose your DNO it’s determined by where you live. Your DNO is responsible for maintaining the local network, responding to power cuts, and connecting new properties and renewable energy systems to the grid. If you’ve ever had a power cut and called 105 (the UK’s free power cut helpline), you’ve been contacting your DNO.
Transmission Network
The transmission network is the high-voltage electricity “motorway” that carries electricity over long distances from power stations and large wind farms to distribution networks. In Great Britain, this is operated by National Grid Electricity Transmission. The equivalent in Scotland is operated by SP Transmission and SSEN Transmission.
National Grid
National Grid is both the company that owns and operates the electricity transmission network in England and Wales, and the name commonly used to refer to the wider UK electricity system. The Electricity System Operator (ESO) function which balances supply and demand on the grid in real time was separated from National Grid as a public body, NESO, in late 2024.
Balancing Mechanism
The balancing mechanism is the process by which the electricity system operator ensures that supply and demand on the grid are matched at all times. Generators and large consumers can submit offers to increase or decrease their output or consumption at a given price, and the system operator uses these to fine-tune the balance.
When there’s too much electricity on the grid (usually on windy, low-demand days), generators might be paid to reduce their output sometimes even paid to switch off entirely. When demand exceeds supply, generators get paid to increase their output.
Interconnector
Interconnectors are high-voltage cables that link the UK’s electricity system to those of neighbouring countries. The UK has interconnectors to France, the Netherlands, Belgium, Denmark, and Norway. They allow electricity to be traded across borders and provide additional security of supply if prices are lower in one country, electricity can flow to where it’s more valuable.
BSUoS (Balancing Services Use of System)
BSUoS charges are levied on electricity suppliers and generators to cover the cost of National Grid’s work to balance the electricity system. These costs ultimately flow through to business electricity bills, though domestic customers are less directly exposed to them. Reforms to BSUoS have been a topic of ongoing debate in the industry.
DUoS (Distribution Use of System)
DUoS charges are what electricity suppliers pay to use the local distribution network to deliver electricity to customers. Like BSUoS, these costs are passed through to customers as part of the overall unit rate. DUoS charges vary by time of day and by DNO region.
TNUoS (Transmission Network Use of System)
TNUoS charges are what suppliers and generators pay to use the national transmission network. Like DUoS, they’re ultimately passed on to customers. The way TNUoS is calculated and allocated has been subject to significant reform in recent years.
Renewable Energy and Low Carbon Terms
As the UK moves toward its net zero targets, renewable energy and low carbon technology terminology is becoming increasingly important for both households and businesses to understand.
Renewable Energy
Renewable energy comes from sources that are naturally replenished sunlight, wind, rain, tides, and geothermal heat. In the UK context, the most significant renewable sources are wind power (both onshore and offshore), solar photovoltaic (PV), and hydropower.
Renewable energy is distinct from “green” energy in marketing terms not all tariffs marketed as “green” source all their electricity from renewable generation. The Renewable Energy Guarantee of Origin (REGO) scheme is used to certify the origin of renewable electricity.
Solar PV (Photovoltaic)
Solar PV systems convert sunlight directly into electricity using semiconductor materials. The photovoltaic effect — where certain materials generate an electric current when exposed to light was discovered in the 19th century, but solar panels as we know them became commercially viable from the 1950s onwards.
In the UK, a typical domestic solar PV system is between 3 and 6 kilowatt-peak (kWp) in size and can generate a significant proportion of a household’s annual electricity needs, though output is much higher in summer than winter. The Microgeneration Certification Scheme (MCS) accredits solar installers and products in the UK.
kWp (Kilowatt-Peak)
The kilowatt-peak is the rated output of a solar panel or solar PV system under Standard Test Conditions (STC) a set of controlled laboratory conditions that simulate bright sunshine. It represents the maximum power the system can generate under ideal conditions.
Because real-world conditions are rarely as good as STC, your actual output will typically be lower than the kWp rating suggests, particularly in the UK’s often cloudy climate.
Feed-in Tariff (FiT)
The Feed-in Tariff was a government scheme that paid households and small businesses for the electricity they generated from renewable sources, regardless of whether they used it themselves or exported it to the grid. It ran from 2010 until it closed to new applicants in April 2019.
Many households are still receiving FiT payments if they signed up before the scheme closed. Those payments continue for the full 20-year term.
Smart Export Guarantee (SEG)
The Smart Export Guarantee replaced the export element of the Feed-in Tariff in January 2020. Under the SEG, licensed electricity suppliers with more than 150,000 customers are required to offer tariffs to small-scale renewable energy generators for the electricity they export to the grid.
Unlike the old Feed-in Tariff, the SEG only pays for exported electricity not for generation. Export rates vary between suppliers and change over time, so it’s worth shopping around. Ofgem’s SEG page has the latest information on which suppliers offer SEG tariffs and the rates on offer.
Air Source Heat Pump (ASHP)
An air source heat pump is a low-carbon heating technology that extracts heat from outdoor air even when temperatures are well below freezing and uses it to heat your home and hot water. It works similarly to a fridge in reverse: rather than moving heat from inside to outside, it moves heat from outside to inside.
ASHPs are much more energy-efficient than conventional gas or electric boilers because they move heat rather than generate it. A well-installed ASHP might deliver three to four units of heat for every one unit of electricity consumed a ratio known as the Coefficient of Performance (COP).
The Boiler Upgrade Scheme offers grants of up to £7,500 toward the cost of installing an ASHP in England and Wales.
Ground Source Heat Pump (GSHP)
Similar in principle to an air source heat pump, but instead of extracting heat from the air, a ground source heat pump extracts it from the ground, where temperatures remain relatively stable throughout the year. GSHPs typically achieve slightly higher efficiency than ASHPs but require either horizontal ground loops (needing a significant area of land) or vertical boreholes drilled deep into the ground.
Coefficient of Performance (COP)
The COP is the ratio of heat output to electrical energy input for a heat pump. A COP of 3.5, for example, means the heat pump delivers 3.5 kWh of heat for every 1 kWh of electricity it consumes. Higher is better.
The COP varies depending on the outdoor temperature heat pumps work hardest in cold weather, and their efficiency drops accordingly. The Seasonal Coefficient of Performance (SCOP) averages the COP over a full heating season and gives a more realistic picture of annual performance.
Biomass
Biomass energy comes from organic materials wood, agricultural residues, dedicated energy crops, and organic waste. It can be used to generate electricity, heat, or both (in combined heat and power systems).
Biomass is often described as carbon neutral because the carbon released when it’s burned was absorbed from the atmosphere as the plant material grew. In practice, the picture is more complicated, as growing, harvesting, and transporting biomass all have carbon costs. The UK Biomass Strategy sets out the government’s position on sustainable biomass use.
Biogas
Biogas is a mixture of methane, carbon dioxide, and other gases produced by the anaerobic digestion of organic waste materials things like food waste, agricultural manure, and sewage sludge. It can be used directly for heat and power generation or upgraded to biomethane and injected into the gas grid.
Wind Power
Wind power harnesses the kinetic energy of moving air to generate electricity via wind turbines. The UK has the largest installed offshore wind capacity in the world, and wind power now accounts for a significant and growing share of the UK’s electricity generation. The largest offshore wind farms in UK waters can generate over a gigawatt of power each.
Contracts for Difference (CfD)
The Contracts for Difference scheme is the UK government’s primary mechanism for supporting new low-carbon electricity generation. Under a CfD, a generator receives a guaranteed “strike price” for the electricity they produce. If the market price is below the strike price, the government (via the Low Carbon Contracts Company) tops up the difference. If the market price is above the strike price, the generator pays back the difference.
CfDs provide revenue certainty that allows developers to finance large projects like offshore wind farms. The cost to consumers depends on the relationship between strike prices and market prices over time.
Renewables Obligation (RO)
The Renewables Obligation was the predecessor to the CfD scheme and required electricity suppliers to source a specified proportion of their electricity from eligible renewable sources. Generators received Renewables Obligation Certificates (ROCs) for each MWh of eligible electricity generated, which they could sell to suppliers to help meet their obligations.
The RO closed to new applicants in 2017 but generators already accredited under the scheme continue to receive ROCs for 20 years from their accreditation date.
Energy Efficiency and Buildings Terms
Whether you’re a homeowner trying to reduce your bills or a business working toward sustainability targets, these terms come up constantly.
Energy Performance Certificate (EPC)
An Energy Performance Certificate rates the energy efficiency of a property on a scale from A (most efficient) to G (least efficient). EPCs are legally required when a property is built, sold, or let, and must be carried out by an accredited assessor.
The EPC shows the current rating and a potential rating if recommended improvements were made. It also includes an estimated energy cost and a list of recommended improvement measures with indicative costs and savings.
The government has been consulting on raising the minimum EPC rating required for rented properties, with proposals to require properties to achieve at least a C rating by 2030. Gov.uk’s EPC guidance is a good starting point if you need more detail.
Display Energy Certificate (DEC)
Similar to an EPC but used for large public buildings over a certain size that are occupied by public authorities. Unlike EPCs, which assess the theoretical energy efficiency of a building, DECs reflect the actual energy use of a building based on meter readings. They must be displayed publicly hence the name.
Minimum Energy Efficiency Standards (MEES)
MEES regulations in England and Wales set a minimum level of energy efficiency for privately rented properties. Since April 2020, landlords haven’t been able to grant new tenancies for properties with an EPC rating below E. The rules are evolving, and proposals to tighten the minimum to C by 2030 have been widely discussed.
Retrofit
Retrofit refers to the process of improving the energy efficiency of an existing building fitting insulation, upgrading heating systems, installing double or triple glazing, and so on. It’s distinct from new-build construction, where energy efficiency can be designed in from the start.
Retrofitting the UK’s existing housing stock is one of the biggest challenges in meeting the country’s net zero targets, given that millions of homes were built long before modern energy efficiency standards existed.
Cavity Wall Insulation
Cavity wall insulation fills the gap between the inner and outer layers of a cavity wall with insulating material typically mineral wool, polystyrene beads, or polyurethane foam. It’s one of the most cost-effective ways to reduce heat loss in properties with unfilled cavity walls.
Most UK homes built between the 1920s and 1990s have cavity walls. If yours is unfilled, it could be losing a significant amount of heat. The Energy Saving Trust has a good overview of what’s involved and the typical savings.
Solid Wall Insulation
Older properties — typically those built before the 1920s — often have solid walls rather than cavity walls, which makes insulation more challenging. Solid wall insulation can be applied either externally (cladding the outside of the building) or internally (adding insulated plasterboard to internal walls). Both approaches are more expensive and disruptive than cavity wall insulation but can deliver significant heat loss reductions.
Heat Pump Ready
A property described as “heat pump ready” has been sufficiently insulated and has heating distribution systems (typically underfloor heating or oversized radiators) that are suitable for the lower flow temperatures at which heat pumps operate most efficiently. Conventional gas boilers often run at flow temperatures of 70-80°C, while heat pumps typically work best at 35-55°C.
SAP Rating
The Standard Assessment Procedure (SAP) is the methodology the UK government uses to assess and compare the energy performance of dwellings. It’s the technical backbone of the EPC rating. SAP calculates a property’s energy costs per square metre based on its construction, insulation levels, heating and hot water systems, and ventilation.
Carbon, Net Zero, and Sustainability Terms
These terms are becoming part of everyday conversation as the UK pushes toward its climate commitments, but they’re often used loosely or interchangeably in ways that don’t always reflect their precise meanings.
Net Zero
Net zero means achieving a balance between the greenhouse gases emitted and those removed from the atmosphere. The UK has a legally binding target to reach net zero by 2050, set under the Climate Change Act 2008 as amended in 2019. Reaching it requires drastically reducing emissions across all sectors energy, transport, agriculture, industry, and buildings as well as increasing the capacity to remove carbon from the atmosphere.
It’s important to note that net zero is not the same as zero emissions. Some residual emissions may remain in hard-to-decarbonise sectors, but these would need to be offset by carbon removal.
Carbon Neutral
Carbon neutral is sometimes used interchangeably with net zero but is often applied at the level of an individual product, company, or event rather than a national economy. A company claiming to be carbon neutral might be offsetting all its emissions through projects like tree planting or carbon capture rather than actually eliminating them.
Carbon Offsetting
Carbon offsetting is the practice of compensating for greenhouse gas emissions in one place by reducing or removing emissions elsewhere. Common offset projects include reforestation, protection of existing forests, renewable energy in developing countries, and methane capture from landfill.
Offsets are controversial in sustainability circles. Critics argue they can be used as an excuse to avoid genuine emissions reductions and that the quality of offset projects varies enormously. The Gold Standard and Verra’s Verified Carbon Standard are two of the main international certification schemes for carbon offsets.
Carbon Intensity
Carbon intensity measures the amount of carbon dioxide (CO₂) emitted per unit of electricity generated. It’s expressed in grams of CO₂ per kilowatt-hour (gCO₂/kWh). A grid powered entirely by renewables would have a carbon intensity of zero; a grid powered entirely by coal would have a carbon intensity of around 800-900 gCO₂/kWh.
The UK’s grid carbon intensity has fallen dramatically over the past 15 years as coal generation has been phased out and renewable capacity has grown. National Grid’s carbon intensity API provides real-time and forecast carbon intensity data — useful for businesses and individuals who want to shift their electricity use to lower-carbon periods.
Scope 1, 2, and 3 Emissions
These categories are used in corporate carbon reporting to classify different types of greenhouse gas emissions:
Scope 1 emissions are direct emissions from sources owned or controlled by a company burning gas in a boiler, for example, or fuel in company vehicles.
Scope 2 emissions are indirect emissions from the generation of purchased electricity, heat, or steam. When your business buys electricity and that electricity was generated from fossil fuels, the associated emissions count as Scope 2.
Scope 3 emissions are all other indirect emissions in a company’s value chain everything from the production of purchased materials and goods, to employee commuting, business travel, and the eventual disposal of products. Scope 3 is typically the largest category for most organisations but also the hardest to measure and reduce.
SECR (Streamlined Energy and Carbon Reporting)
SECR is a mandatory reporting framework for large UK companies, introduced in April 2019. It requires qualifying organisations to report their UK energy use, greenhouse gas emissions, and energy efficiency actions in their annual directors’ report. The government’s SECR guidance sets out exactly who needs to report and what they need to include.
ESOS (Energy Savings Opportunity Scheme)
ESOS requires large UK organisations to carry out energy audits of their buildings, industrial processes, and transport every four years. The audits must identify energy-saving opportunities, though companies are not obliged to implement the recommendations. Compliance is monitored by the Environment Agency.
Climate Change Agreement (CCA)
CCAs are voluntary agreements between energy-intensive industries and the Environment Agency that offer a reduction in the Climate Change Levy (CCL) in exchange for commitments to improve energy efficiency or reduce carbon emissions. Sectors ranging from steel and ceramics to food and drink manufacturing have CCAs in place.
Climate Change Levy (CCL)
The CCL is a tax on energy supplied to business and public sector consumers, charged on electricity and gas. Its purpose is to incentivise energy efficiency and discourage unnecessary energy use. Some sectors get a reduced rate through CCAs, and renewable electricity supplied with a REGO certificate was historically exempt, though the rules around this have changed over the years.
Energy Market and Regulatory Terms
Finally, a look at the key regulatory and market structures that shape how energy is priced and supplied in the UK.
Ofgem
Ofgem — the Office of Gas and Electricity Markets is the independent regulator for gas and electricity markets in Great Britain. It sets the rules that energy suppliers must follow, administers the price cap for domestic consumers, investigates complaints and market conduct, and oversees the various environmental and social schemes that suppliers are required to fund. Ofgem’s website is an invaluable resource for understanding your rights as an energy consumer.
The Big Six (Now the Big Five or Big Four)
For years, the UK energy market was dominated by six large vertically integrated suppliers: British Gas, EDF Energy, E.ON, npower, Scottish Power, and SSE. The “Big Six” was a well-established shorthand for the dominant players.
Following a wave of supplier failures and mergers during the energy crisis of 2021-2022 when over 30 smaller suppliers exited the market the landscape changed significantly. As of 2024, the largest suppliers include British Gas, Octopus Energy, E.ON Next, OVO, EDF Energy, and Scottish Power, though the exact ranking shifts over time.
Wholesale Energy Market
The wholesale energy market is where energy suppliers buy the gas and electricity they then sell on to customers. Prices are set by supply and demand when global demand for gas rises (as it did sharply following Russia’s invasion of Ukraine in 2022), wholesale prices rise, and this eventually feeds through to consumer bills.
Suppliers typically hedge their wholesale purchases buying energy in advance at a fixed price to protect against price spikes — but the precise hedging strategy varies between suppliers and affects how quickly wholesale price changes feed through to retail prices.
Energy Broker
An energy broker is an intermediary who helps businesses find and switch to energy contracts, typically earning a commission from the supplier. Using a broker can save time and sometimes money, but it’s important to understand how they’re remunerated and to check that any deal they recommend really is competitive.
The business energy broking market has historically had some transparency issues around undisclosed commissions. Regulation has tightened in recent years, but it’s always worth asking any broker exactly how they’re paid before engaging their services.
TPI (Third Party Intermediary)
The energy industry’s umbrella term for companies that act as intermediaries between suppliers and customers including brokers, consultants, and comparison websites. TPIs are increasingly subject to regulatory oversight, with Ofgem having introduced a code of practice that suppliers are required to adhere to when working with TPIs.
Capacity Market
The Capacity Market is a UK government mechanism designed to ensure there’s enough electricity generating capacity to meet peak demand. Capacity providers power stations, battery storage systems, and demand-side response providers bid in annual auctions to provide capacity at a future date. Those that win receive capacity payments in exchange for committing to be available when needed.
Demand Side Response (DSR)
Demand side response involves reducing or shifting energy consumption at times of peak demand or high prices, rather than increasing generation capacity. Large industrial users might agree to reduce their electricity consumption when the grid is under stress, in exchange for payments or lower tariffs. As battery storage and smart appliances become more common, DSR is increasingly relevant to smaller businesses and even households.
Quick Reference Acronyms at a Glance
For those times when you just need a quick reminder of what a particular acronym stands for, here’s a handy summary:
- AMR Automated Meter Reading
- ASHP Air Source Heat Pump
- BSUoS Balancing Services Use of System
- CCA Climate Change Agreement
- CCL Climate Change Levy
- CfD Contract for Difference
- COP Coefficient of Performance
- DEC Display Energy Certificate
- DNO Distribution Network Operator
- DSR Demand Side Response
- DUoS Distribution Use of System
- EPC Energy Performance Certificate
- ESOS Energy Savings Opportunity Scheme
- FiT Feed-in Tariff
- GSHP Ground Source Heat Pump
- HH Half-Hourly
- kW Kilowatt
- kWh Kilowatt-Hour
- kWp Kilowatt-Peak
- MCS Microgeneration Certification Scheme
- MEES Minimum Energy Efficiency Standards
- MPAN Meter Point Administration Number
- MPRN Meter Point Reference Number
- MW Megawatt
- Ofgem Office of Gas and Electricity Markets
- RO Renewables Obligation
- ROC Renewables Obligation Certificate
- SAP Standard Assessment Procedure
- SCOP Seasonal Coefficient of Performance
- SECR Streamlined Energy and Carbon Reporting
- SEG Smart Export Guarantee
- SMETS Smart Metering Equipment Technical Specification
- SVT Standard Variable Tariff
- TPI Third Party Intermediary
- TNUoS Transmission Network Use of System
Where to Go for More Help
Energy terminology continues to evolve, particularly as the UK energy system transitions toward net zero. New technologies, regulatory changes, and market developments bring new jargon with them every year.
For ongoing help and guidance, these are some of the most reliable UK resources:
- Ofgem the regulator’s site covers consumer rights, the price cap, and all the major environmental schemes
- Energy Saving Trust practical advice on reducing energy use at home, from insulation to heat pumps to solar panels
- Citizens Advice help with energy bills, complaints, and understanding your rights
- GOV.UK Energy pages official government guidance on grants, schemes, and regulations
- Smart Energy GB everything you need to know about smart meters
- MCS Certified finding accredited installers for renewable energy and heat pump systems
- National Grid’s Carbon Intensity site real-time data on how green the UK grid is at any given moment
The energy world has always had more than its fair share of jargon some of it genuinely necessary shorthand for complex technical concepts, and some of it, frankly, just the industry’s way of making things sound more complicated than they need to be.
The good news is that once you’ve got a handle on the key terms, it gets much easier to engage with your energy bills, compare tariffs, evaluate new technologies, and hold suppliers and brokers to account. Knowledge genuinely is power in this sector and given how much most of us spend on energy every year, it’s knowledge worth having.
If there’s a term you’ve come across that isn’t covered here, feel free to leave a comment below and we’ll do our best to add it. This glossary is updated regularly as new terms and schemes emerge.