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Glossary

A

Air Conditioning Inspections
Under the Energy Performance of Buildings Directive (EPBD) air-conditioning inspections are required to be undertaken if the effective rated output of the cooling systems within a building is more than 12 kW. The deadline for completing air conditioning inspections for cooling systems of over 12 kW was 4th January 2011, and for systems of over 250 kW was 4th January 2009. It is a requirement that these inspections are completed every 5-years.
Air Handling Unit (AHU)
An air handler, or air handling unit, is a device used to condition and circulate air as part of a heating, ventilating, and air conditioning (HVAC) system. Efficiency is improved through greater control.
Annual Quantity (AQ)
Every gas supply has an established AQ (measured in kWh). This refers to the amount of gas that is expected to be consumed within the period of a year. This figure is derived upon consideration of the kW rating of any gas equipment on site (boilers, water heaters etc), the size of building and analysis of past consumption figures. It is important that the annual quantity is set at the appropriate level or take or pay charges may be incurred at default rates.
API
American Petroleum Institute.
APX
Amsterdam Power Exchange. Run spot market platforms across Europe.
ARA
Amsterdam – Rotterdam – Antwerp. Coal price hub.
Automated Meter Reading (AMR) & Smart Metering
Automated Meter Reading (also often referred to as smart metering) enables consumption data associated with a non-half hourly electricity supply or gas supply to be automatically recorded, thereby negating the need for the meter to be manually read. The industry standard is for AMR to record usage at half hour intervals (half hourly data). AMR/Smart Metering systems usually use some form of communications line or SMS text facility so that the data can also be retrieved remotely.
Available Capacity (Av Cap) or Agreed Capacity
Electricity supplies have an established available capacity (measured in kVA – kilovolt Amperes) which denotes the maximum load that may be drawn on that respective supply. For larger supplies, where the available capacity is set at over 80 kVA, this is billed at a rate per kVA per month and is displayed as a separate item on suppliers billing. Available capacity charges are a ‘pass through’ charge as the DNO bills the electricity supplier, who in turn bills the end user. Small commercial supplies and domestic supplies tend not to have a confirmed available capacity and the maximum load available to the supply is determined only by the physical size of the supply. For such supplies, the capacity is not displayed as a separate charge on suppliers billing and is accounted for in the overall electricity unit rate.

B

Backwardation
The market condition wherein the price of a forward or futures contract is trading below the expected spot price at contract maturity.
Bacton Interconnector
The Bacton Interconnector is a natural gas pipeline between Bacton Gas Terminal, England and Zeebrugge, Belgium.
Balancing Mechanism
This is the mechanism by which electricity generation and demand is matched.
Baseload
A building's baseload represents the minimum energy use for the building when not in operation.
BBL Pipeline
Gas pipeline from Balgzand (Netherlands) to Bacton (UK).
Beach Gas
Gas delivered to UK terminals before entering the NTS.
Bear Market
Condition in which there is a general decline of the price of a commodity over a period of time.
Bull Market
The opposite of a Bear Market, in which there is a consistent price increase.

C

Calorific Value (CV)
This is the amount of heat given by the specified quantity of gas. This is used to calculate the energy consumed based upon the volume of gas used. It is measured in joules per kilogram.
Capacitors
Capacitors may be installed in a building to reduce the level of reactive power. (Please see power factor & reactive power). Power factor correction capacitors bring currents back into phase, so that the electrical power demand (kVA) equals the useful or active power (kW), resulting in a unity power factor thus avoiding reaction power charges.
Carbon Allowances
Starting in 2012, participants of the CRC will be required to buy allowance from Government each year to cover their emissions in the previous year. This means that organisations that decrease their emissions can lower their costs under the CRC.
Carbon Footprint
A measure of the amount of carbon dioxide or CO2 emitted through the combustion of fossil fuels.
Carbon Reduction Commitment Energy Efficiency Scheme (CRC EES)
The Carbon Reduction Commitment Energy Efficiency Scheme is a mandatory scheme aimed at improving energy efficiency and cutting emissions in large public and private sector organisations. The scheme features a range of reputational, behavioural and financial drivers, which aim to encourage organisations to develop energy management strategies that promote a better understanding of energy usage. Participants are required to submit Carbon Footprint and Annual Reports providing their energy usage, calculating the associated emissions in tonnes per Kilowatt Hours (t/kWh) and purchasing allowances to offset their emissions.
CDM
CDM (Clean Development Mechanism) is one of the mechanisms established under the 1997 Kyoto Protocol for emissions trading.
Certified Emission Reductions (CERs)
A type of emissions unit (or carbon credit) issued by the Clean Development Mechanism (CDM) Executive Board for emission reductions achieved by CDM projects and verified under the rules of the Kyoto Protocol.
Climate Change Agreement
Climate Change Agreements allow energy intensive business users to receive an 80% discount from CCL providing certain emissions targets are met and energy efficiency schemes are implemented.
Climate Change Levy (CCL)
The Climate Change Levy (CCL) is a tax on the use of energy in industry, commerce and the public sector (domestic properties are CCL exempt). The levy is applied per kWh in order that the additional charge incurred is proportional to usage. The aim is to encourage users to improve energy efficiency and to help the UK meet its commitment to reduce greenhouse gas emissions.
Combined Heat and Power (CHP) / Co-generation
This refers to a heating technology, which generates heat and electricity simultaneously from the same energy source. In most cases this energy source is mains gas. This represents an economical method of providing heat and power and is most efficient when the heat can be used on site or within close proximity.
Combined Heat and Power Unit (CHP)
Larger sites often choose to generate part or all of their electricity. A CHP unit is an engine which runs on natural gas (a cheaper fuel than electricity) and generates both heat and electricity.
Commodity Futures Contract
An agreement to buy or sell a set amount of a commodity at a predetermined price and date. Buyers use these to avoid the risks associated with the price fluctuations of the product or raw material, while sellers try to lock in a price for their products.
Contango
The market condition wherein the price of a forward or futures contract is trading above the expected spot price at contract maturity.
Contracts for Difference (CFD)
The contractual arrangements suppliers have with the generators to purchase specific amounts of electricity.
CT Metering
CT stands for current transformer. When current in a circuit is too high to directly apply to measuring instruments, a current transformer is fitted to produce a reduced current accurately proportional to the current in the circuit. Applies to metering that is 100 amp and above.

D

Daily metered (DM) sites
Supply points with meters that read natural gas volume either on a continuous or daily basis.
Data Collector (DC)
Where a supply is half hourly there is a nominated data collector in place that is responsible for collecting the half hourly data from the meter via a comms link and passing this on to the supplier for billing purposes.
Datalogger
This is a device which is fitted to a meter to record, store and transmit reading and measurements.
Degree Day
Degree day figures quantify how cold (or hot) the weather has been in a given region, expressing the result as a single index number for each month or week.
Display Energy Certificate (DEC)
Display Energy Certificates (DECs) are designed to promote the energy performance of a building. Based on actual energy usage, the certificate assigns a rating from A-G. DECs are compulsory for buildings with public access and must be displayed in a prominent position.
Distribution Board
A distribution board is a component of an electricity supply system which divides an electrical power feed into subsidiary circuits, while providing a protective fuse or circuit breaker for each circuit, in a common enclosure.
Distribution Losses
These are charges relating to the electrical losses that occur as electricity is transmitted through the lines of the Distribution Network Operator (DNO).
DNO (Distribution Network Operator)
The DNO is the owner of the physical electricity network which provides electricity to buildings. DNO’s are licensed to distribute electricity in the UK by the Office of Gas and Electricity Markets (OFGEM).
DUOS (Distribution Use of System) Charges
DUOS charges are imposed by the Regional Electricity Companies (REC) for use of the ‘local’ distribution systems. These fees are payable to the distribution network operator by the suppliers. These charges are passed onto end users via the suppliers' utility bills. In all inclusive contracts, the rates include an estimate of the DUOS charges and no separate DUOS charge will show on the electricity invoices. For 'energy only' contracts the DUOS charges are separated out from the contract rates and these charges are billed accurately to the end user.

E

EFA Month
A month calculated in accordance with the UK electricity market, which may not equate with a calendar month.
Energy Performance Certificate (EPC)
Under the Energy performance of Buildings Directive it is a requirement that all commercial buildings being rented or sold must have an Energy Performance Certificate (EPC). The aim of the directive is to improve energy performance by encouraging owners and tenants to choose energy efficient buildings, therefore placing an incentive on landlords and building occupiers to reduce their energy use.
ESCO
An ESCO (Energy Services Company) is a commercial business providing innovative financing solutions for sustainable low carbon investment.
Estimated Annual Consumption
The EAC is a calculated estimate of energy usage for a supply.
EU ETS
The EU ETS (European Union Emissions Trading Scheme) is a greenhouse gas emission trading scheme covering the energy intensive sectors of the EU Member States.
European Emission Allowance (EUA)
A permit to emit one tonne of carbon under the European Union Emissions Trading System (EU ETS).

F

Feed in Tariffs (FIT)
Feed in Tariffs (FIT) became available in Great Britain on 1st April 2010. The Feed in Tariffs are a Government-backed measure introduced to help the UK Government meet international carbon reduction targets. The tariff scheme is an incentive scheme which provides payments to people/companies from the energy suppliers for electricity generated via renewable energy technologies such as Solar PV and Wind Turbines.
Fossil Fuel Levy
In England and Wales the Fossil Fuel Levy is set at 0.3%. This levy was introduced to cover the cost of decommissioning the nuclear generating plants.

G

Gas Distribution Network (GDN)
This refers to the gas distribution system which distributes gas to buildings. There are eight main gas networks throughout the British Isles, which are owned by National Grid, Northern Gas Networks, Scotia Gas Networks and Wales and West Utilities, as well as a number of Independent Gas Transporters (IGTs).
Gigawatt (GW)
One billion watts, equivalent to 1000MW.
Green and Partially Green Energy Tariffs
Renewable energy is created by sources which are naturally replenished. Types of renewable energy include: wind, hydro and solar. Other, less common, forms of renewable energy include biomass, biofuel and anaerobic digestion. Renewable energy contracts sand tariffs can vary in type from 100% renewable to low carbon options which have a percentage of the energy sourced from renewables. Some renewable contracts are CCL (climate charge levy) exempt and certificates to prove levy exemption are provided by suppliers.

H

Half Hourly Data (HHD)
HHD is kWh usage data collected by a meter every half an hour. It is a requirement that all supplies with an available capacity of over 100 kVA have a half hourly meter. Smart meters can also be installed for supplies with a capacity of under 100 kVA to facilitate the remote retrieval of half hourly data. Data loggers may be installed to any sub metering in order to remotely retrieve half hourly data. The data is usually collected and stored in the meter which the data collector may dial into via a comms line to secure the data remotely. Increasingly SMS text facilities are used to transmit data negating the need for a physical comms line.
Half hourly Meters (HHM)
A half hourly meter (HHM) registers how much electricity is used in a building for every half hour of every day. They typically have a fixed or mobile phone connection to provide this data to energy suppliers automatically each month, rather than be manually read.
Hedge
Making an investment to reduce the risk of adverse price movements in an asset. For example, the purchase of a gas future to account for possible imminent price increases.
High Voltage (HV)
Supply voltage above 1000 kVA (1MVA).

I

Imbalance
The condition where there is a variance between the quantity of supply and the quantity of demand contracted or sold demand.
Interconnector
A cable connection allowing electricity to flow between two countries or markets.
Interconnector (IUK)
The group of European energy companies that own and operate the Bacton Interconnector.
Interruptible Service
Power supplies that are subject to interruption for a number of days, hours or in the event of system emergencies. In exchange for interruption to their supply, buyers pay lower prices. The cost per unit for this service is called a non-firm rate or interruptible rate.
Isle of Grain
LNG import and storage facility.

J

K

Kilovolt-Ampere (kVA)
A unit of power equal to 1,000 volt-amperes; the mathematical product of the volts and amperes in an electrical circuit. This unit is used as a measure of capacity assigned to an electrical supply by the DNO.
Kilo-watt Hour (kWh)
The standard unit of measurement for both electricity and gas consumption.
Kilowatt (kW)
Kilowatts (one thousand watts) are the units used to measure Maximum Demand.
Kyoto Protocol
The Kyoto Protocol is an international agreement linked to the United Nations Framework Convention on Climate Change. It sets binding targets for 37 industrialized countries and the European community for reducing greenhouse gas (GHG) emissions. These amount to an average of five per cent against 1990 levels over the five-year period 2008-2012.

L

Liquefied Natural Gas (LNG)
Natural gas (mainly methane) that has been converted to liquid form for ease of storage or transport.
Load Factor (LF)
Load factor is the ratio of average energy demand (load) to maximum demand (peak load) during a specific period.
Load Management
The process of balancing the supply of electricity on the network with the electrical load by adjusting or controlling the load rather than the power station output. This can be achieved by direct intervention of the utility in real time, by the use of frequency sensitive relays triggering circuit breakers, by time clocks, or by using special tariffs to influence consumer behaviour.
Low Voltage (LV)
Supply voltage normally at 240 or 415 volts.

M

Maximum Demand (MD)
Maximum demand is a measure of the highest instantaneous load pulled by a supply over a fixed period of time (i.e. the maximum demand provided on monthly suppliers billing will be the maximum load pulled at any point in time over the period of a month).
Measuring Instruments Directive (MID)
The MID (2004/22/EC) is a directive by the European Union, which intends to create a common market for measuring instruments across the EU countries.
Mega Watt (MW)
A measure of power - 1,000,000 watts.
Meter Operator (MOP)
All electricity supplies must be assigned a meter operator. Where the available capacity of a supply falls under 100 kVA the meter operator defaults to the regional electricity company. For supplies over 100 kVA a formal meter operator’s agreement must be set up with any chosen meter operator. The role of the meter operator is to provide a meter on a rental basis and to deal with any problems with the meter or data collection comms link. The meter operator can also be, but is not necessarily, the data collector.
Meter Serial Number (MSN)
The unique identification number for a meter, generally found on the front face of the meter.
MPAN
Every electricity supply has a unique identification number called an MPAN (Meter Point Administration Number). Although meter serial numbers associated with an electricity supply may change as meters are replaced, the MPAN registered to the supply will remain the same as this is the actual identification code for the supply.
MPAN Profile Class
Every MPAN is assigned to a profile class. This profile class provides information about the typical consumption profile of the supply.
MPR Number
Every gas supply has a unique identification number called an MPR (Meter Point Reference Number). Although meter serial numbers associated with a gas supply may change as meters are replaced, the MPR number registered to the supply will remain the same as is the actual identification code for the supply.

N

National Grid
The National Grid owns the main transmission systems and is responsible for transmitting the electricity from the generator to the local area. All electricity generated in mainland UK is put into the National Grid before being fed into distribution networks.
Nominated Consumption
The annual quantity of gas nominated by the customer as their estimated consumption requirement.
Non-half hourly (NHH)
Supplies using under 100 kVA, typically domestic or small site supplies.

O

OFGEM
OFGEM is the Office of Gas and Electricity Markets, regulating the gas and electricity industries in Great Britain.
One in Twenty
Peak day demand taken from the greatest expected gas demand on any given day over a 20-year period.
Over a hundred
A generic label for electricity sites that have demands greater than 100 kW.

P

Peak Load
Electricity load between 0700 and 1900 Monday to Friday.
Percentage Day
This refers to the percentage ratio of electricity used in the daytime against that used in the night.
Periodic Electrical Inspections (PEI)
A periodic electrical inspection (also known as a fixed wire testing) is a sequence of tests undertaken on the electrical installation within a building to ensure this conforms to the national wiring regulations and health and safety standards. The inspection is undertaken in accordance with the BS7671 wiring regulations. It is a requirement that this is completed every 5-years for businesses. The report produced will make recommendations (categorized by severity) for any areas of non-compliance found.
Photovoltaics (PV)
The direct conversion of solar radiation into electricity by the interaction of light with the electrons in a semiconductor device or cell.
Power Factor (PF)
Power factor is a measure of the electrical efficiency of an electrical load and is the ratio of the useful power drawn from the electrical supply (kW) and the total power drawn (kVA). Inductive loads (such as electric motors, transformers, and the control gear of fluorescent lighting etc.) require reactive magnetising (or 'watt-less') energy to provide the alternating magnetic field necessary for the operation of these systems. This causes the current to be out of phase and reactive power (kVArh = reactive power) is therefore produced. Reactive power charges will be incurred on the suppliers billing when this occurs. The optimum power factor is unity. A power factor below 0.9 will incur reactive power charges.
Power Purchase Agreements (PPA)
Contract for sale of renewable energy.
Profile Class
This is the first and second number of the 21 digit Meter Point Administration Number (MPAN). The profile class allows suppliers to denote the appropriate standard pricing product for supplies.

Q

R

Reactive Power Charges
The means by which consumers with a poor power factor pay more for their electricity than consumers with a good power factor.
REC
Regional Electricity Company.
Renewable Energy
Please refer to 'Green and Partially Green Energy Tariffs'.

S

Seasonal Time of Day (STOD)
Unit based supply offer where electricity is supplied at different unit rates according to the time of day the power is taken by the customer.
Second Tier
When a site is being supplied by a supplier other than the local REC it has 'gone second tier'.
Smart Metering
Please refer to 'Automatic Meter Reading (AMR) & Smart Metering'.
Spill
A generator’s surplus electricity that has not been contracted to provide to market counterparties.

T

Take or Pay
Take or Pay is a clause included in utility contracts by most suppliers whereby a supplier may impose penalties should the supply use a percentage threshold under or over what has been forecast and contracted for. Therefore, any change in occupancy or changes to the operation of the building could cause energy usage to change over the contract period, and could therefore result in this clause being enforced.
Targeting and Monitoring (T&M)
Targeting and monitoring is a means by which to understand, reduce and control energy. A good targeting and monitoring programme relies upon the collection of accurate data and uses this to analyse consumption. This analysis allows problem areas to be identified which may then be targeted.
Terawatt (TW)
One trillion watts (1000 billion).
Therms
This is a unit of measurement for gas. 1 therm is equal to 29.3071 kWh.
Top-up
Additional electricity bought by a generator if it produces less than contracted.
Transformer
Equipment that is used to change the voltage of an electric current. Transformers can increase or decrease voltage.

U

UH
UH (Under one hundred) is a generic label for electricity sites that have maximum demands lower than 100 kW.
UK Emissions Trading Scheme (UK ETS)
The UK ETS was a voluntary emissions trading system created as a pilot prior to the mandatory EU ETS which it now runs in parallel with. It ran from 2002 and it closed to new entrants in 2009.

V

Value-at-risk (VaR)
A measure of the risk of loss on a specific portfolio of financial assets.
Voltage
Voltage is also known as electrical potential difference or electric tension and is the electrical pressure in a circuit.
Voltage Optimization
Voltage optimization is a term given to the systematic controlled reduction in the voltages received by an energy consumer to reduce energy use, power demand and reactive power demand. Voltage optimization improves power quality by balancing phase voltages and filtering harmonics and transients from the supply.

W

X

Y

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