Glossary of Business Energy Terms
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FAQ'sGlossary of Energy Terms

Glossary of Energy Terms

Our glossary of energy terms helps to explain all the technical words and abbreviations used in our industry.

Amp

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An Amp is a unit that measures the rate of flow of an electrical current.

Annual Agreed Quantity (AAQ)

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The annual volume of gas consumed, measured in Kilowatt hours (kWh).

Apparent Power

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The product of the voltage (volts) and the current amps and comprises both active and reactive power and is measured in kVa or Mva.

Availability Charge

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The charge for the amount of power made available to the clients premises and is related to the agreed supply capacity. The distribution company sets the rate and it is expressed in kVA.

Available Supply Capacity (ASC)

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The agreed maximum supply capacity, measured in kVa, which a customer is allowed to take from the distribution system through their connection point. Customers pay a monthly charge for each unit of capacity. The maximum demand should not exceed the ASC.

Base Load

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The minimum amount of electricity being used during non-operational hours.

Bearish

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Believing that market prices are about to fall.

BETTA

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The British Electricity Transmission and Trading Arrangement introduced in 2005 covering England, Wales and Scotland, replacing NETA which did not cover Scotland.

Big 6 Suppliers

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The UK's major energy suppliers SSE, Npower, E.ON, Scottish Power, EDF, SSE and BGB

Bilateral Energy Trading

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Trading whereby two parties for example a generator and a supplier enter into a contract to deliver electricity at an agreed time in the future.

Bullish

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Believing that market prices are about to rise.

Calorific Value

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The ratio of energy to volume measured in mega joules per cubic meter (MJ/m).

Capacitor

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An electrical device that provides reactive power to the system and is often used to compensate for reactive load and help support system voltage.

Carbon Emissions Trading Scheme

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A scheme in which greenhouse gas emissions are controlled by setting a cap on total transmissions and allowing the market sectors to reach an economically balanced response via trading of emissions allowances. Allowances are allocated initially, perhaps through a free distribution or through an auction, and the total allocation is adjusted periodically.

Carbon Trust

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An independent not-for-profit company set up by the government with support from business to encourage and promote the development of low carbon technologies. Key to this aim is its support for UK businesses in reducing carbon emissions through funding, supporting technological innovation and by encouraging more efficient working practices.

Change of Tenancy (COT)

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Where the legal business ownership changes and no valid energy contract is now in place.

CCGT (Combined Cycle Gas Turbine)

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A gas fired electricity generation plant.

CCL Discount

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The benefits of the Climate Change Levy Discount Scheme result in up to 80% discount on the CCL in return for meeting energy or carbon saving targets.

CCL Relief

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A reduction of the CCL agreed as part of a trade sector Climate Change Agreement.

Climate Change Agreement

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An agreement between the Government and a business user, whereby a reduced rate of Climate Change Levy is payable in return for a commitment by the user to achieve certain pre-determined targets for energy usage or carbon emissions.

Climate Change Levy (CCL)

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A charge introduced by the Government on 1 April 2001 on UK non-domestic fuel. The Government’s aim when introducing the levy was to encourage business to use less energy, and contribute to the reduction of Carbon Dioxide emissions.  Please click here for the latest CCL charges.

Climate Change Programme

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Published in 2000, it sets out the government and Devolved Administration strategic approach to tackling Climate Change and meeting the UK's Kyoto target of a 12% reduction in greenhouse gas emissions from 1990 levels by 2008-2012 and the domestic goal of reducing C02 emissions by 20% by 2010.

CO2

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Carbon Dioxide - A Greenhouse gas.

Contract End Date (CED)

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The end of a fixed price period, the supplier will supply past this date until the supply end date

Cogeneration

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The simultaneous production of electricity and another form of useful energy (such as heat or steam) through the sequential use of energy, resulting in increased efficiency of fuel use.

Combined Heat & Power (CHP)

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CHP is very efficient technology for generating electricity and heat together. A CHP plant is an installation where there is simultaneous generation of usable heat (normally for space heating) and power (usually electricity) in a single process. CHP typically achieves a 35-40% reduction in primary energy usage compared with power stations and heat only boilers.

Communication Charge

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The monthly fee payable by a customer, which covers the collection of half hourly data by the meter operator. This can be billed direct by the MOP or passed on through the current supplier.

Connection Agreement

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Agreement between client and the local distribution company (for example Western Power in the Midlands) setting out the terms and conditions with which each are bound concerning the provision and use of the connection.

Contract Price Structures

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This indicates a supply offer, which has all delivery charges (DuoS & TuoS) built into the unit rates for the supply of electricity.

Contracts for Difference (CfDs)

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A replacement for the renewable obligation charge and a mechanism for top up payments to renewable energy plants when the price of electricity is below a set level.

Correction Factor

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The measure used to convert cubic meter gas units into kWh, the standard correction factor is 1.02264

Current Transformer

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A device that is used to reduce (or increase) the supply current levels. For example a 11000/ 415 Volt transformer would convert a 11,000 volt supply to 415 volt supply.

Customer’s Installation

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Any structures, equipment, lines appliances or devices used or to be used by any customer and connected directly or indirectly to the Rec’s network.

D0010 Data Flow

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The data flow that communicates Meter Readings taken from a customer's meter to the supplier.

D0019 Data Flow

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Estimated Annual Consumption Data Derived from the D0010, the flow communicates the estimated annual consumption of a meter.

D0036 Data Flow

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Validated Half Hourly data reads that contains the interval data, meter readings and demand.

D0055 Data Flow

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Registration of a energy supplier's intent to appoint a specified metering point to their supply.

D0057 Data Flow

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Rejection of a suppliers registration attempt (D0055) because certain critical industry data does match that held by MPAS.

D0058 Data Flow

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Notification to the incumbent supplier that the new supplier is intending to take ownership of the meter on the date stated.

D0064 Data Flow

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Notification of an objection to change of supplier made by the old supplier, notification that the incumbent supplier is objecting to the transfer of the meter point to the new supplier.

D0067 Data Flow

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A notification sent to the new supplier to inform them that the incumbent supplier has objected to the transfer of the meter, usually on the grounds of a valid contract or an outstanding debt on the account.

Data Aggregator

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The organisation appointed to aggregate the meter-reading data received from the appointed Data Collectors and forward it to suppliers.

Data Collector

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The organisation responsible for collecting, processing and validating the meter reading data, who then passes the information to the Data Aggregator.

De-energisation

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The interruption of supply, so that electricity cannot flow from the network to the premises.

DEFRA

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Department for Environment, Food and Rural Affairs.

Demand

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The requirement for power.

Demand Site Management

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The planning, implementation, and monitoring of activities designed to encourage consumers to modify patterns of electricity usage, including the timing and level of electricity demand.

Disconnection

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The permanent removal of the meter, cabling and service from the property once it is established that a supply will not be required in the future and this permanently removes the MPAN.

Distribution System

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The local wires, transformers, substations and other equipment used to distribute and deliver energy to consumers.

DUoS (Distribution Use of System)

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The charges incurred for distributing electricity across the local area system to the supplied premises.

Embedded Generator

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A generator with a direct connection to a PES’s distribution system, rather than NGC’s transmission system.

Energy White Paper

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The White Paper was the first comprehensive, forward-looking statement of UK energy policy for over 20 years. The white paper set out four new goals for energy policy: to put ourselves on a path to cut the UK's carbon dioxide emissions by 60% by the year 2050, with real progress by 2020, to maintain the reliability of energy supplies, to promote competitive energy markets in the UK and beyond and to ensure that every home is affordably heated.

Enhanced Capital Allowance

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Enhanced Capital Allowances (ECAs) enable a business to claim 100% first-year capital allowances on their spending on qualifying plant and machinery.

European Emissions Trading Scheme

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The EU ETS is one of the policies being introduced across Europe to tackle emissions of carbon dioxide and other greenhouse gases and combat the serious threat of climate change. The scheme commenced on the 1st January 2005. The phase runs from 2005-2007 and the second phase will run from 2008-2012 to coincide with the first Kyoto Commitment Period. Further 5-year periods are expected subsequently.

Excess Availability Charges

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A penalty charge being applied by certain suppliers to clients who are drawing kVa above their Available Supply Capacity (ASC). This can be three times the contracted pence per kVa rate.

Exit Point

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A point of connection at which a supply of electricity may flow between the Rec’s system and the client’s installation, suppliers installation or the distribution system of another person.

Extra High Voltage

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22,000 volts or higher voltage

Feasibility Study

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A methodology for identifying where and how energy is used on a site within core processes and then making recommendations for reducing usage and or eliminating waste.

Firm Gas

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Gas supplied to a customer on a guaranteed basis, without interruption.

Fixed Charge

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A monthly of quarterly charge levied by the supplier and is in addition to the standing charge.

Forwards Contract

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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.

Fossil Fuel

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An energy source formed in the Earths crust from decayed organic material. The common fossil fuels are oil, coal, and natural gas.

Futures Contract

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Similar to a forwards contract these are normally trade through an exchange on standard contract terms with profits or losses calculated and paid daily.

Gas Substation

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A pressure reduction station located on the customers’ premises where gas is reduced from mains pressure regulated at a medium or low pressure for domestic or industrial use.

Gate Closure

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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.

Generation

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This covers the production of electricity at power stations. At present the main fuels used are gas, nuclear and coal, although there is now a growing use of renewable forms of energy, such as wind power, the burning of gas from landfill and waste incineration.

Gigawatt (GW)

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A unit of power equal to 1 billion watts; 1 million kilowatts, or 1,000 megawatts.

Gigawatt-hour (GWh)

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A unit of energy equal to million kilowatt-hours. 1 GWh is equivalent to the total electricity typically used by 250 homes in one year.

Grid Supply Point

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A point of supply from the national transmission system to the local system of the distribution network operator.

GSS

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Guaanteed Service Standard – customer service standards of performance that are set by OFGEM.

Half-Hour Data (HHD)

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This is the product of the half-hour data meter. The data is used for invoicing, tendering and reporting purposes.

HV

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High Voltage (Normally 11,000 Volts).

Imbalance

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A situation where there is a difference between the amount of power produced and the amount of electricity contracted or sold.

Interconnector

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A connection or link between power systems that enables them to draw on each others' reserve capacity in time of need.

Interruptible Gas

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Gas supplied to a customer whose site has an alternate fuel source, on the basis that the supply might be interrupted for a specified period.

IPPC (Integrated Pollution Prevention Control)

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Regulatory demands on industrial activity throughout the EC are more stringent than ever. The Integrated Pollution and Control (IPPC) directive means companies face new aspects for consideration, controls to put in place and an increase in work required to obtain and comply with environmental permits.

Kilovolt Amperes (KVA)

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Also known as Total Power. The resultant effect of the active (kW) and reactive (kVAr) power is the total power measured in kVa. Kva = kW/power factor.

Kilowatt (kW)

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A standard unit of electrical power equal to 1,000 watts, or to energy consumption at a rate of 1,000 joules per second.

Kilowatt-hour (kWh)

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A unit of energy consumption. A typical home uses around 3,300 kWh of electricity per annum.

Kyoto Agreement

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An international Agreement signed by countries agreeing to limit or reduce their global emissions.

Liquified Natural Gas (LNG)

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When natural gas is cooled to a temperature of approximatley -160 degrees at atmospheric pressure, it condenses to a liquid called Liquified Natural Gas (LNG). Natural gas is composed primarily of methane (typically at least 90%), but may also contain ethane, propane and heavier hydrocarbons.

Load

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The amount of electric power delivered or required at any specific point or points on an electrical system. The requirement originates at the energy-consuming equipment of the customer.

Load Factor

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Measures the relationship between unit consumption and maximum demand and is the percentage capacity utilisation figure of a site's power consumption. To calculate load factor take the total number of units of consumption, divide by the maximum demand, divide by the number of hours in the period, and multiply by 100.

Load Management

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The process of shifting the use of electricity from periods of high demand to periods of lower demand, when the cost of electricity is usually lower.

LV

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Low Voltage, normally at 240 or 415 Volts.

Managed Load

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The fixed energy base load of the total curve. This can be purchased either all at once or step-by-step.

Maximum Demand

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The highest average demand (in kW or kVA) occurring in a half hour period.

Megawatt (MW)

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The equivalent to one thousand kilowatts (kW).

Meter Operator (MOP or MO)

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The organisation appointed to install and maintain metering equipment.

Meter Point Reference Number

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A unique reference number identifying each meter and used in the preparation of supply tenders.

MPAN Core

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A 13-digit number (the bottom line of the Supply Number) made up of the: Distributor Identifier (first two digits), the company which provides the distribution network for the supply address. Meter Point unique reference (11-digit number), which is linked to the supply address.

MPRS

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The Meter Point Registration System is owned by the distribution companies. It contains all the MPAN’s for that distribution area.

Net Capacity

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The maximum load that a generating unit, station or other electrical apparatus can carry under specified conditions for a given period of time without exceeding approved limits of temperature.

NETA - New Electricity Trading Arrangements

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This came into force on the 27th March 2001 and replaced the old ‘electricity pool’. NETA is a new wholesale market, comprising trading between generators and suppliers of electricity in England and Wales. Under NETA, bulk electricity will be traded forward through bi-lateral contracts and on one or more power exchanges. Those trading will include generators, suppliers, traders and customers.

NGC

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National Grid Company, the company which runs the England and Wales Balancing Mechanism and transmission system.

NHH

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Non Half hourly sites – sites that take a power supply less than 100kW.

OFGEM

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Office of Gas and Electricity Markets.

Peak Demand

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The maximum load during a specified period of time.

Plant Mothballing

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When a plant is not operating because there is no demand for its services the plant is 'mothballed'.

Power Factor

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A Power Factor is a measure of how effectively electricity is being used on a site. Certain types of equipment cause poor power factors, which reduces the capacity of the network to supply power. Distribution companies will charge customers for this through reactive power charges.

Reactive Charges

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Charges applied to a client’s invoice in cases where certain suppliers and distribution companies enforce a penalty for reactive power use.

Real Power

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See ‘Active Power’.

Regulator

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OFGEM is the Office of the Gas and Electricity Markets, regulating the gas and electricity industries in the UK. You can get further information about gas and electricity from Energywatch, the gas and electricity consumer organisation. This is a statutory body representing the interests of gas and electricity consumers in the UK.

Reinforcement

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Any alteration to the existing system designed to enable the system to distribute an increased amount of electricity.

Renewable Energy

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Energy derived from resources that are regenerative. This includes solar power, wind, wave and tide and hydroelectricity. Wood, straw and waste are often called solid renewable energy, while landfill gas and sewerage gas can be described as gaseous renewable.

Renewable Obligation

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The obligation placed on licensed electricity suppliers to deliver a specified amount of their electricity from eligible sources.

Site Survey

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A site survey is the process used to obtain a preliminary assesment of energy use. It is carried out on site and usually includes a review of current energy policy, energy managment processes and staff awareness and an inspection of all on-site power services and areas of major energy use.

SOQ

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Supply Offtake (Daily) Quantity measures in kWh.

Spark Spread

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The difference between market price and the cost of production.

Standing Charge

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A Monthly or quarterly charge levied by the local distribution company.

Sub-Metering

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The term often used when a property owner installs a separate meter to monitor the consumption of a utility such as water, gas or electricity.

Substation

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Facility equipment that switches, changes, or regulates electric voltage. An electric power station which serves as a control and transfer of power flow, transform voltage levels, and serve as delivery points to industrial customers.

Supply Agreement

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A contract between a supplier and the customer to supply electricity at an agreed tariff for an agreed duration of supply contracts are of 12, 18 or 24-month duration but longer and shorter are possible.

System Buy Price (SBP)

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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)

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The price paid in the Balancing Mechanism by a party that has produced more electricity than it had customers 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.

Terawatt-hour (TWh)

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The equivalent to one thousand gigawatt hours (GWh).

The Carbon Trust

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The Carbon Trust is an independent, not-for-profit company, which was created by the UK government. The Carbon Trust helps business and the public sector cut carbon emissions, and supports the development of low carbon technologies.

Therm

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This is a unit of measurement for gas. 1 therm is equal to 29.3071kWh.

Top-up Load

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This is priced like a normal contract with fixed price all inclusive rate at agreed signing.

Trade Association

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An association of firms that operate in a specific industry.

Transco

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UK gas transportation and emergency service.

Transformer

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An electrical device for changing the voltage of alternating current.

Transmission

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The transfer of electricity at high voltage from the power stations across the UK through wires on pylons to points where it can be distributed to users. This is known as the Grid System and is owned and operated by the National Grid Company (NGC).

TRIAD

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Used for the calculation of TUoS Charges, the TRIAD is calculated by looking at the three maximum demand points (in kW) of the supply at half hourly time periods, and then averaging the total. The figures used are usually selected from winter months, and at peak times, as these periods are set to reflect the point at which the highest demand occurs on the National Grid.

TUoS (Transmission Use of System)

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The charges incurred for transmitting electricity across the National Grid network from the source of generation to the network of the local distribution company. The level of these charges is usually calculated by applying a rate charge to the TRIAD demand level.

UK Kyoto Target

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In 1997, representatives from over 170 nations met in Kyoto, Japan to put together a new global treaty - the Kyoto Protocol to the United Nations Framework Convention on Climate Change (UNFCCC) - laying down legally binding reductions in greenhouse gas emissions throughout developed countries.

Voltage Transformer

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A device that reduces (or increases) the supply voltage for example a 11000/415 Volt transformer would convert volt supply to 415 volt supply.