technical glossary

Our glossary contains explanations and definitions of important energy industry terms. Click on a letter below to see the topics:

A | B | C | D | E | F | G | H | I | J | K | L | M | N | O | P |

Q | R | S | T | U | V | W | X | Y | Z

Advanced Conversion Technologies (ACT)

Technologies used for renewable CHP and Waste to Energy CHP systems including anaerobic digestion, gasification and pyrolysis.

Anaerobic Digestion

A process by which organic matter is decomposed by bacteria, producing hydrogen sulphide, methane, Carbon dioxide and in certain conditions Hydrogen Gas. Collectively, these gases are called biogas which can be used as fuel in CHP schemes.

Assistance for Areas with High Electricity Distribution Costs (AAHEDC)

Cost intended to reduce distribution cost to consumers of in specific areas. This cost was introduced with the Energy Act 2004, replacing the previous 'Hydro benefit' arrangement. An Assistance Amount is recovered by National Grid which is passed on to the Distributor of the Specified Area to reduced distribution charges. At present, the North of Scotland is the only Specified Area.

> Read more on AAHEDC


The percentage of the time that electricity generating plant is available to produce electricity.

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A methane-rich gas produced by the biological or chemical breakdown of organic matter e.g. as in landfill or sewage gas, anaerobic digestion, gasification.


Organic matter for living or recently living organisms that is carbon, hydrogen and oxygen based. Biomass can be used directly as a fuel source or converted into biofuels and other energy products.

> Read our biomass generation case study

Balancing Services Use of System Charges (BSUoS)

Charges that apply to generators and suppliers that are based on the energy that they have taken from or supplied to National grid in every half hourly settlement period. The charges are paid to NGET to recover the costs of the balancing mechanism.

> Read more on BSUoS

Buy-out fund (RO)

The Buy-out funds are accumulated by Ofgem during a compliance period (April to March) from payments of the buy-out price by electricity supply companies. This is redistributed to suppliers according to their compliance with the Renewables Obligation.

Buy-out price (RO)

This is the price per MWh charged to electricity supply companies unable to meet their obligation by presenting Renewable Obligation Certificates.

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The power rating of a generating station, for example in megawatts (MW), at which it would operate under the design operating conditions and fuel or resource input.

Capacity Market

Scheme for capacity providers introduced under Electricity Market Reform. The Capacity Market is a competitive auction at which developers and generators make bids for their capacity four years ahead of delivery, or one year ahead in the case of Demand Side Response (DSR). Successful bidders receive stable payments in return for committment to deliver energy when required.

> Read more about the Capacity Market

Carbon Capture and Storage (CCS)

CCS is the removal of CO2 from fossil fuels either before or after combustion and its long-term storage in structures such as deep saline aquifers and depleted oil and gas reserves.

Carbon Dioxide (CO2)

CO2 is a greenhouse gas that occurs naturally in the Earth’s atmosphere. It is comprised of two oxygen atoms that are covalently bonded to one carbon atom and produced during combustion, respiration and organic decomposition.

Carbon Price Floor

Carbon Price Floor, also known as the Carbon Tax, was is a pillar of Electricity Market Reform that was implemented in April 2013. The system sets a minimum price of carbon in the UK and in the 2014 budget it was announced that the rate was to be frozen.

Cash out (BSC)

Cash out charges are the costs levied on market participants that consume or generate more or less electricity than they have been contracted for.  

Climate Change Levy (CCL)

The CCL taxes the use of energy in the public sector, industry and commerce. Suppliers add this charge to the bills of commercial users, with the money generated used by government to facilitate a 0.3% point reduction in the contribution employers make to national insurance.

> Read more on the CCL

Combined Cycle Gas Turbine (CCGT)

CCGT is a generation technology combining steam turbine with gas turbine. A gas-fired electricity plant generates electricity producing waste heat which then drives a steam turbine. This increases the generation output without increasing fuel input.

Combined Heat and Power (CHP)

CHP plants (also known as cogeneration plants) use both electrical and heat outputs, resulting in an overall more efficient use of fuel. A CHP system captures heat generated and supplies it to users close to the plant as hot water or steam. CHP fuelled with natural gas is a low carbon rather than a zero carbon option, but using biomass as a fuel allows for the possibility of renewable CHP.

Contracts for Difference (CfD)

Support scheme for generators introduced under Electricity Market Reform. The CfD will replace the Renewables Obligation scheme but will also support other forms of low-carbon generation in addition to renewables. Under the scheme generators receive difference payments plus revenue from selling their power through a PPA.

> Read more about CfDs

Coal Bed Methane (CBM)

Methane recovered from coal seams that are un-mined. This methane can be recovered before mining takes place or be recovered from seams that will not be mined; this is called Virgin Coal Bed Methane (VCBM)

Coal Mine Methane (CMM)

Methane recovered from working mines. It can be released as a direct result of the physical process used in coal extraction or due to the collapse of rock strata that surrounded the mined section of the coal seam.


This is the combustion of two or more fuel types inside the same combustion device. An example of this is the co-firing of biomass products with fossil fuels in conventional fossil-fuel power stations.

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Declared Net Capacity (DNC)

DNC is the maximum rating of a generator, minus any power consumed by the generator at which it can run continuously. It is the installed capacity minus the in house load.

Demand Side Response (DSR)

Demand Side Response involves electricity users varying demand due to changes in the balance between supply and demand, usually in response to prices. DSR providers can receive payments for their energy through the Capacity Market.

> Read more about the Capacity Market

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Embedded generation

Embedded Generation refers to smaller Generators, including many renewable and CHP assets that are connected to the Distribution Network but not the Transmission Network. This is due to their relatively low output, geographic location and more the generally lower cost of connection than that associated with transmission connection.

Emission Performance Standard (EPS)

Introduced as part of Electricity Market Reform, the Emissions Performance Standard aims to act as a “regulatory backstop” on the amount of emissions new fossil fuel power stations are allowed to emit with an annual limit on carbon emissions.

Energy from Waste (EfW)

EfW refers to the energy produced from the combustion of waste under controlled conditions. This generates electricity and/or heat and further reduces the volume and hazardousness of the waste.

Energy crop

Crops harvested for the purpose of making biofuels or for combustion, using the crop’s energy content to produce electricity or heat. Types of energy crop include miscanthus and short-rotation coppice.

Energy Efficiency Ratio

Ratio between the amount of energy produced by a machine and the amount of energy it consumes, indicating the efficiency of a particular energy transformation technology.

Electricity Market Reform (EMR)

The Coalition Government’s Electricity Market Reform (EMR) seeks to maintain enough generation in the UK to meet demand despite planned closures of power stations and to decarbonise the industry in-line with legally binding targets. The rationale is to achieve those objectives at a lower cost than using existing policies as the Government also has the objective of keeping bills affordable.

> Read more about EMR

Electricity Trading Services Agreement (ETSA)

This is a SmartestEnergy product that facilitates access to the wholesale market through SmartestEnergy's trading teams.

> Read more about our products

EU Emissions Trading Scheme (EU ETS)

EU ETS is the European Union’s ‘cap and trade’ mechanism intended to cap the emissions of the most polluting EU businesses, form a market for trading pollution permits and enforce a price on carbon.

> Read more on the EU ETS

Extra High Voltage (EHV)

Electricity transportation assets between 22 - 132kv. Greater than 132kv is transmission.

Feed-in Tariff

The Feed-in Tariffs scheme was introduced in 2010 to incentivise new renewable generation. Under the scheme energy suppliers make regular payments to generators such as communities, landowners and householders who produce their own electricity from renewable sources.

> Read more the FiT scheme

Fossil Fuels
Non-renewable, naturally-occurring fuels (e.g. coal, oil and natural gas). They are hydrocarbon deposits that have formed from the remains of living matter from a previous geologic time period.

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The production of electrical energy from a generator over a period of time.

Greenhouse Gas (GHG)

GHGs occur in the earth’s atmosphere, absorbing and emitting radiation. The most abundant GHGs are water vapour, ozone, carbon dioxide, methane and nitrous oxide and they play a fundamental role in the creation of the greenhouse effect.

Grid Supply Point (GSP)

A GSP is the point of connection between the transmission system and the distribution system.


A unit of power equivalent to one thousand Megawatts; a unit of energy equivalent to one thousand Megawatt hours.

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High Voltage (HV)

Electricity transportation assets between 11 - 22kv.

Hydroelectric Energy

The process of generating electricity using the power of water currents. Hydroelectric power is produced by guiding water flow through a turbine to create the momentum required to drive an electric generator.

> Read our hydro generation case study

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Integrated Gasification Combined Cycle (IGCC)
A process technology which turns coal into synthesis gas (syngas). This process then takes out any impurities from the coal before it is burnt. Attempts are then made to convert any pollutants produced during the combustion phase into re-useable bi-products.


The non-continuous nature of some forms of renewable electricity generation e.g. wind power.

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kW; kWh

A unit of power equivalent to one thousand Watts; a unit of energy equivalent to one thousand Watt hours i.e. one hour of electricity production at a constant rate of one kilowatt.

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Levy Exemption Certificate (LEC)

In the Summer Budget 2015 it was announced that the exemption for Renewable Source Electricity from the Climate Change Levy (CCL) would be removed.

With the removal of the exemption, Levy Exemption Certificates (LECs) issued after 1st August 2015 no longer have any value.

> Read more on LECs

Liquefied Natural Gas (LNG)

LNG is Gas converted into liquid form temporarily for ease of storage or transportation.

Load Factor

The ratio of the electrical energy produced by a generating unit relative to the electrical energy that could have been produced at continuous full-power operation during the same period.

Low Voltage (LV)

Electricity transportation assets between 1kv – 11kv

Line Loss Factor (LLF)

Used to scale energy consumed/ generated in order to account for losses on the UK’s Distribution Networks.

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Marine energy

This term refers to both wave and tidal stream energy produced from the conversion of movement of tidal flow and waves into electricity.

Meter Operator (MOP)

This is the authority responsible for maintaining and installing gas and electricity meters. Data from these installed meters is then collected from an assigned Data Collector and used to bill customers.

Meter Point Administration Number (MPAN)

is a unique 21- digit reference which identifies individual supply points in Great Britain such as individual domestic residences. This number can be found on every bill and remains the same even if the meter at the property is changed.


The decentralised production of low, zero or renewable energy at a small scale e.g. domestic solar panels and micro wind turbines.


A unit of power equivalent to one thousand kilowatts; a unit of energy equivalent to one thousand kilowatt hours.

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Non-Fossil Fuel Obligation (NFFO)

A statutory measure introduced during the 1990s to support renewable generation. NFFO has since been succeeded by the Renewables Obligation (RO).

> Read more on NFFO

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Power Purchase Agreement (PPA)

An agreement by which a supplier purchases energy from a generator for an agreed time period. Short term PPAs are typically up to 5 years and long term PPAs range from 10-15 years. 

> Read more on PPAs

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Renewable Energy Guarantees of Origin (REGO)

A certificate which verifies that electricity has been produced from renewable sources. One REGO represents one megawatt hour of electricity.

> Read more from ON REGOs

Renewable Energy

A source of energy that occurs naturally, is theoretically inexhaustible and not derived from nuclear or fossil fuel. Such energy sources include wind, (on and off-shore), solar, hydro, tidal, wave, geothermal and carbon neutral technologies such as biomass and biogas.

> Read more on renewable energy for business

Renewable Obligation Certificate (ROC)

A certificate issued by Ofgem to an accredited generator for eligible renewable electricity generated and supplied to customers by licensed electricity suppliers. One ROC is issued for each MWh of eligible output. Electricity suppliers meet their obligations under the Renewable Obligation by presenting sufficient ROCs.

> Read more on ROCs

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Short-Rotation Coppice (SRC)

An energy crop such as high yield varieties of Poplar and Willow which can be used for processes in electric power generating stations and other applications. It can used on its own or together with other fuels.

Solar Photovoltaic energy (PV)

The direct conversion of solar radiation into current electricity using a photovoltaic cell. A PV solar cell consists of 2 layers of semi-conducting material such as monocrystaline silicon and creates an electrical field between the two layers when solar energy reaches the cell.

Solar Thermal Energy (STE)

Is a technology that harnesses solar energy for thermal energy. A solar thermal collector concentrates energy from the sun to heat a working fluid. The heat created drives an engine which generates electricity. STE differs from photovoltaic technologies which convert sunlight directly into electricity.


A facility that converts electricity voltage from low to high or the reverse. This facility is part of the electrical generation, transmission and distribution systems where electricity may flow through a number of substations between generation and consumption, creating step changes in voltage.

Supplier Obligation

A levy on suppliers introduced under Electricity Market Reform. The costs of Contracts for Difference and Capacity Market schemes are charged to suppliers and then recovered through consumer bills. 

> Read more about EMR

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Transmission network

The electricity system which transports electricity from grid-connected power stations to local distribution networks.

Transmission Network Use of System (TNUoS) charges

Charge reflecting the costs incurred by the Transmission Owner (TO) for installing,  maintaining and operating the transmission system. The TNUoS charge is divided into a 27:73 ratio between generators that export on to the system and suppliers that import from it. This charge is based on the Investment Cost Related Pricing (ICRP) methodology.

> Read more on TNUoS charges


The three half-hour periods during Winter (1st November to 28th February) with the highest national demand for electricity, separated by ten clear days.


A unit of power equivalent to one million Megawatts; a unit of energy equivalent to one million Megawatt hours.

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Waste Incineration Directive (WID)

WID was made effective through the Environmental Permitting Regulations in England and Wales and aims to reduce the threat that waste incineration poses to the environment and human health. The rules of this directive apply to most activities that involve burning waste, including burning waste for fuel.

> Read more on the WID

Wind Energy

Electricity produced from wind turbines that convert the wind’s kinetic energy into electrical energy. Wind turbines consist of blades which rotate around a horizontal hub connected to a gearbox and generator (other types of configuration are available). The generator uses magnetic fields, converting this rotational energy into electricity. Wind energy can be produced off shore (where wind turbines harness the energy from air moving over the oceans) and onshore (where wind turbines are anchored to land).

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