industry overview
Our industry overview contains explanations and definitions of important energy industry terms. Click on a term to view the explanation:
organisations
Agency for the Cooperation of Energy Regulators (ACER)
ACER was introduced as part of the EU Third Energy Package to facilitate and coordinate the duties of National Regulatory Authorities (NRAs) at EU level. It works with the EU institutions and stakeholders to deliver a number of instruments in order to achieve a single energy market.
BIS – Department of Business, Innovation and Skills (BIS)
The department in charge of government policy in a range of areas including consumer affairs, regional and local economic development and business regulation and support. BIS was created in 2009 through the merging of the Department for Innovation, Universities and Skills and the Department of Business, Enterprise and Regulatory Reform.
Department of Energy and Climate Change (DECC)
A government department created in October 2008 by adopting some of the functions of the Department for Business, Enterprise and Regulatory Reform and the Department for Environment, Food and Rural Affairs to bring together energy policy. DECC has four key priorities: 1) Save energy with the green deal and support vulnerable customers; 2) Deliver secure energy on the way to a low carbon energy future; 3) Drive ambitious action on climate change at home and abroad; 4) Manage our energy legacy responsibility and cost-effectively.
The Department for Environment, Food and Rural Affairs (DEFRA)
A Government Department in the UK, responsible for making policy and legislation in areas such as the natural environment, biodiversity, sustainable development and the green economy.
> Visit the Defra websiteDistribution Network Operators (DNOs)
Distributors own and operate the network of towers and cables that distribute electricity from the national transmission network to homes and businesses. Distribution remains a monopoly business and as such is subject to regulation with associated price controls administered and set by Ofgem.
An independent organisation owned by the UK's DNOs to facilitate data transfer services to the utilities industry such as customer switching.
> Visit the ElectraLink website
The Balancing and Settlement Code Company (BSCCo) established in 2000, which administers the BSC for Great Britain. Elexon's four main roles are to: 1) Run the day-to-day settlement of wholesale electricity balance and imbalance amounts, 2) Mange changes to settlement systems and processes, 3) Provide assurance that the BSC arrangement works, 4) Support governance arrangements. Elexon is funded by the industry and is a wholly-owned subsidiary of National Grid.
Suppliers licenced by Ofgem that buy electricity from generators and sell it on to end users. They are the first point of contact when arranging an electricity supply to domestic, commercial and smaller industrial premises.
Energy Networks Association (ENA)
The industry body representing transmission and distribution operators for gas and electricity in Ireland and the UK. The goals of the ENA are to assist UK and Ireland energy networks to be the most efficient, reliable, safest and sustainable networks in the world.
European Network of Transmission System Operators for Electricity (ENTSO-e)
An association for European Transmission System Operators (TSOs) for electricity. The ENTSO-e was established in 2008 and its key responsibilities are to create a ten-year network development plan, establish network codes and facilitate network coordination through common network operation tools.
NGET own the electricity transmission system in England and Wales and the gas transmission system in GB and have the role of Transmission System Operator (TSO). Their key responsibilities include the economic balancing of supply and demand to maintain frequency within statutory limits and the facilitation of the energy market by maintaining adequate transmission capability within agreed security standards.
> Visit the National Grid website
Non-Fossil Purchasing Agency (NFPA)
Agency that administers generation contracts awarded under the Non-Fossil Fuel Orders (NFFOs). The NFPA Scotland is responsible for these contracts in Scotland.
Northern Ireland Authority for Utility Regulation (NIAUR)
The Utility Regulator for the single electricity market of the Republic of Ireland and Northern Ireland. NIAUR’s key responsibilities are the regulation of gas, water, electricity and sewerage industries.
Office of Gas and Electricity Markets (Ofgem)
The regulator of energy markets in Great Britain. It is an independent statutory body established under the Electricity Act 1989 with the merging of the Office of Electricity Regulation (OFFER) and Office of Gas Supply (Ofgas). Ofgem’s key functions include the issuing and enforcing of licences for suppliers, setting price controls in some areas of the market and protecting energy consumers’ interests through effective competition.
codes and arrangements
Balancing and SettlementCode (BSC)
BSC arrangements were introduced to England and Wales in 2001 and into Scotland in 2005. They set out the rules and governance arrangements for processes that ensure supply and demand for electricity is balanced and that relevant payments are reconciled. Elexon administers the wholesale balancing and settlement arrangements and provides procurement services necessary to operate the BSC arrangements efficiently.
British Electricity Transmission and Trading Arrangements (BETTA)
BETTA replaced the New Electricity Trading Arrangements (NETA) in 2005. These arrangements provide a single wholesale electricity market for Great Britain with a single transmission system operation independent of generation.
Connection Use of System Code (CUSC)
CUSC sets out the contractual framework for connecting to and using National Grid's high-voltage transmission system.
Distribution Connection and Use of System Agreement (DCUSA)
A multi-party contract between DNOs, suppliers and generators in Great Britain which oversees the use of electricity distribution systems and the transporting of electricity to or from the connections to the distribution systems. The contract is administered by Electralink.
Parliamentary Act that provides the core legislation covering the electricity industry. It governs supply, distribution and consumer protection and oversees planning consents for the construction and operation of generating stations within England and Wales.
> Read more on the Electricity Act (1989)
The Electricity (Standards of Performance) Regulations (2010)
Regulation outlining the standards that electricity DNOs and suppliers in England, Wales and Scotland must adhere to. Northern Ireland has its own regulations covering electricity standards.
> Read The Electricity Regulations 2010
Code that covers all technical aspects relating to the connections to and the operation and use of the transmission system along with the operation of electric lines and electrical plant connected to it or to a distribution system.
Master Registration Agreement (MRA)
A multiparty agreement between all licensed electricity DNOs and suppliers to manage the processes established between electricity suppliers and distribution companies to enable electricity suppliers to transfer customers. This agreement sets out the terms for Metering Point Administration Services (MPAS Registrations) and is administered by the MRA Service Company (MRASCo).
Meter Operation Code of Practice Agreement (MOCOPA)
An agreement between electricity distribution businesses and electricity meter operators in Great Britain which authorises meter operators to install and connect meters to the electricity network.
New Electricity Trading Arrangements (NETA)
NETA was introduced in March 2001 for England and Wales, superseding the Pooling and Settlement agreement. In 2005, NETA became BETTA, incorporating Scotland to create the single electricity market of England, Wales and Scotland.
schemes
Carbon Reduction Commitment (CRC)
The CRC Energy Efficiency Scheme, is a mandatory carbon emissions trading scheme. It applies to large organisations in the private and public sector that have a half hourly metered electricity consumption exceeding 6,000MWh per year. The CRC publishes an annual league table that ranks participants energy efficiency performance.
The main was support scheme for renewable electricity projects in the UK before Feed-in Tariffs. It places an obligation on UK suppliers of electricity to source an increasing proportion of their electricity from renewable sources. The RO may only last till 2017, after which payments to generators will be grandfathered for 20 years.
other
Greenhouse Gas Guidance (GHG guidance)
Government issued guidance for businesses and organisations to measure and reduce their greenhouse gas (GHG) emissions, introduce a common framework for reporting greenhouse gas emissions and tackle the confusion that has arisen due to different carbon reporting standards.
A document which sets out the strategy for coordinating and planning public and private investment in UK infrastructure. The first National Infrastructure Plan was published in October 2010 and intents to provide builders, investors and operators of infrastructure with commitment and transparency.
> Read more on the National Infrastructure Plan
National Policy Statements (NPS)
A central part of the Government’s reforms of the planning regime, NPAs will be used by the infrastructure planning commission (IPC) when it makes decisions on applications for development consent for nationally significant energy infrastructure.
Electricity is traded on a wholesale market. The UK wholesale electricity market operates in half-hourly blocks and is based on a system of two-sided trades.
The price of electricity determined by supply and demand between generators and suppliers.
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