This glossary aims to demystify some of our industry’s technical and legislative terms and liabilities.
Legislation Glossary
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Energy Savings Opportunity Scheme (ESOS)
The Energy Savings Opportunity Scheme (ESOS) is a mandatory UK program requiring large organisations to conduct energy assessments every four years. Introduced in 2014, it aims to promote energy efficiency and reduce carbon emissions. ESOS applies to companies that meet one or more of 250+ employees, an annual turnover exceeding £44 million, a yearly balance sheet exceeding £38 million. Participants must measure total energy consumption, conduct audits to identify cost-effective energy-saving opportunities and report compliance to the Environment Agency. While implementation of recommendations is not mandatory, ESOS has led to significant energy savings across buildings, industrial processes, and transportation in participating organisations.
The Feed in Tariff (FiT)
The Feed in Tariff (FiT) was a scheme to promote the manufacture, supply installation and use of small-scale low-carbon electricity generating systems – Solar PV, small-scale wind power, domestic/small-scale combined heat and power (DCHP), small-scale hydropower and anaerobic digestion. This has been replaced by the Smart Export Guarantee.
Streamlined Energy and Carbon Reporting (SECR)
Streamlined Energy and Carbon Reporting (SECR) is a UK framework requiring large companies to disclose energy usage and greenhouse gas emissions in annual reports. Introduced in 2019, it aims to improve energy efficiency and reduce carbon emissions. SECR mandates reporting on UK energy use, associated emissions, intensity ratios, and energy efficiency actions. It applies to quoted companies, large unquoted companies, and LLPs meeting specific criteria. The framework streamlines reporting requirements while expanding the scope of businesses required to report, supporting the UK’s transition to a low-carbon economy.
The Task Force on Climate-related Financial Disclosures (TCFD)
The Task Force on Climate-related Financial Disclosures (TCFD) is a global initiative established in 2015 to develop consistent climate-related financial risk disclosures. It provides recommendations for companies to report on governance, strategy, risk management, and metrics related to climate change. The TCFD framework aims to enhance transparency, inform decision-making, and promote financial stability by helping stakeholders understand climate-related risks and opportunities in business operations. While voluntary, many countries are adopting TCFD-aligned reporting requirements, supporting the transition to a low-carbon economy and improving climate risk assessment in financial markets.
The Department for Energy Security and Net Zero (DESNZ)
The Department for Energy Security and Net Zero (DESNZ) was established in February 2023. It focuses on securing long-term energy supply, reducing bills, and achieving net zero emissions. DESNZ’s responsibilities include maintaining energy supplies, improving energy efficiency, and accelerating green energy infrastructure.
Standardised Disclosure Regulations (SDR)
Standardised Disclosure Regulations (SDR) is a UK framework that aligns with TCFD requiring companies with 500+ employees to disclose their sustainability impacts. It aims to enhance transparency, combat greenwashing, and support informed decision-making. SDR consolidates various reporting requirements into a single, comprehensive system aligned with international standards. It covers environmental and social aspects, mandating detailed disclosures on governance, strategy, risk management, and metrics related to sustainability risks and opportunities.
The upcoming UK Sustainable Reporting Standards (SRS)
The upcoming UK Sustainable Reporting Standards (SRS) aim to unify sustainability reporting requirements, aligning with IFRS Sustainability Disclosure Standards. Expected to be published in Q1 2025, SRS will likely incorporate SECR, TCFD, and ESOS into a comprehensive annual framework. It will focus on sustainability-related risks, opportunities, and climate-related disclosures. Implementation is anticipated for accounting periods beginning on or after January 1, 2026, affecting UK-listed companies and potentially introducing a UK Green Taxonomy.
Key Terms & Acronyms Glossary
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Air Source Heat Pump (ASHP)
A system that transfers heat from outside air to inside a building, used for space heating and hot water production.
Adaptation
Changes made to activities in response to climate change.
As Low As Reasonably Practicable (ALARP)
A principle used in health and safety regulations to balance risk reduction against cost and feasibility.
Building Information Modelling (BIM)
A digital representation of the physical and functional characteristics of a facility.
Building Research Establishment Environmental Assessment Method (BREEAM)
A sustainability assessment method for master planning projects, infrastructure, and buildings.
Baseline
The initial state against which change is measured, often used in carbon emission calculations.
Chartered Institution of Building Services Engineers (CIBSE)
A professional body that supports the science, art, and practice of building services engineering.
Construction Design and Management Regulations (CDM)
UK regulations place legal duties on various parties involved in construction projects.
Carbon Dioxide Equivalent (CO2e)
A standard unit for measuring carbon footprints, expressing the impact of different greenhouse gases in terms of CO2.
Circular Economy
An economic system aimed at eliminating waste and the continual use of resources.
DEFRA (Department for Environment, Food and Rural Affairs)
A UK government department responsible for environmental protection, food production, and rural communities.
Decarbonisation
The process of reducing carbon dioxide emissions through the use of low-carbon power sources.
EPC (Energy Performance Certificate)
A rating scheme to summarize the energy efficiency of buildings.
ESG (Environmental, Social, and Governance)
A set of standards for a company’s operations used by socially conscious investors.
Embodied Carbon
The carbon dioxide emitted during the manufacture, transport, and construction of building materials.
FSC (Forest Stewardship Council)
An organization promoting responsible management of the world’s forests.
GHG (Greenhouse Gas)
Gases that trap heat in the Earth’s atmosphere, contributing to global warming.
GSHP (Ground Source Heat Pump)
A central heating and/or cooling system that transfers heat to or from the ground.
IPCC (Intergovernmental Panel on Climate Change)
The United Nations body for assessing the science related to climate change.
LEED (Leadership in Energy and Environmental Design)
A widely used green building rating system. LCA (Life Cycle Assessment): A technique to assess environmental impacts associated with all stages of a product’s life.
MEES (Minimum Energy Efficiency Standards)
Regulations setting minimum energy efficiency standards for private rented properties.
Net Zero
A state where the total greenhouse gas emissions are equal to or less than the emissions removed from the environment.
Operational Carbon
The carbon dioxide emitted during the operational or in-use phase of a building.
PAS 2060
A specification for the demonstration of carbon neutrality published by the British Standards Institution.
Passive House (Passivhaus)
A voluntary standard for energy efficiency in a building, resulting in ultra-low energy buildings.
RICS (Royal Institution of Chartered Surveyors)
A global professional body promoting and enforcing the highest international standards in the valuation, management, and development of land, real estate, construction, and infrastructure.
Renewable Energy
Energy from sources that are naturally replenishing but flow-limited, such as sunlight, wind, and geothermal heat.
SAP (Standard Assessment Procedure)
The methodology used by the UK Government to assess and compare the energy and environmental performance of dwellings.
SBEM (Simplified Building Energy Model)
A software tool for calculating the energy use and carbon dioxide emissions from non-domestic buildings.
Scope 1, 2, and 3 Emissions
Categories used to report greenhouse gas emissions. Scope 1 covers direct emissions, Scope 2 covers indirect emissions from purchased energy, and Scope 3 covers all other indirect emissions in a company’s value chain.
SRI (Smart Readiness Indicator)
An indicator of the capability of buildings to adapt their operation to the needs of the occupant, optimize energy efficiency and overall performance, and adapt their operation in response to signals from the grid.
UKGBC (UK Green Building Council)
A charity working with the UK building industry to radically improve the sustainability of the built environment.
Whole Life Carbon
The sum of all carbon emissions and removals associated with a building or infrastructure project throughout its life cycle.
Technologies Glossary
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Air Source Heat Pumps
Air source heat pumps use the outside air temperature as an energy source converting any temperature differentiation into usable heat to run heating or water heating systems.
An air source heat pump is usually installed on the outside of a building and can easily be retrofitted. GSHP systems typically operate at temperatures of around 55°C, hence their suitability for underfloor and water heating, low-temperature radiators or fan confection heaters.
They best suit buildings with adequate insulation and do not work with existing high-temperature radiators. Systems may also be eligible for subsidy payments under the Renewable Heat Incentive.
Anaerobic Digestion
Anaerobic digestion is a collection of processes by which microorganisms break down biodegradable material in the absence of oxygen. The process is used for industrial or domestic purposes to manage waste and/or to produce fuels.
Anaerobic digestion is widely used as a source of renewable energy. The process produces biogas, consisting of methane, carbon dioxide and traces of other ‘contaminant’ gases. This biogas can be used directly as fuel, in combined heat and power gas engines or upgraded to natural gas-quality biomethane. The nutrient-rich digestate also produced can be used as fertilizer.
With the re-use of waste as a resource and new technological approaches which have lowered capital costs, anaerobic digestion has in recent years received increased attention among governments in several countries, among these the United Kingdom, Germany and Denmark.
Biomass or Burning Boilers
Biomass or burning boilers use wood (or other biological matter) as a fuel which is considered carbon neutral, as the carbon dioxide produced during combustion is offset by the carbon dioxide absorbed during the plant’s growth.
These boilers usually use logs, wood chips or pellets as fuel and are available in sizes ranging from 10kW upwards (small commercial is around 50kW). The fuel can either be manually fed or, added as an optional extra, supplied into the hopper via a vacuum pump system.
Biomass boilers are most suited to off-mains gas grid locations or in urban areas where the fuel is readily available and the systems can operate on high-temperature heating systems.
Combined Heat and Power Systems (CHP)
Combined heat and power systems are an extremely efficient way of producing useable heat and electricity simultaneously at the point of use from a single fuel.
Micro CHP operates just like a conventional boiler but with the added benefit of supplying some of your electricity needs. Depending on the size of the system, electricity/heat might also be eligible for the government Feed in Tariff or Renewable Heat Incentive payments.
In nearly all cases the system should be sized on the heat load of the unit, even though this will usually mean that some electricity will still need to be bought from an alternative source – usually the national grid.
Electric Vehicles (EV's)
An electric vehicle (EV) is defined as a vehicle that primarily uses electricity for propulsion, employing one or more electric motors. This category encompasses various types of vehicles, including road and rail vehicles, electric boats, and even aircraft. The electricity can be sourced from batteries, fuel cells, or external power supplies.
Fuel Cells
A fuel cell is a device that converts the chemical energy from a fuel into electricity through a chemical reaction with oxygen or another oxidizing agent.
Hydrogen produced from the steam methane reforming of natural gas is the most common fuel, but for greater efficiency hydrocarbons can be used directly such as natural gas and alcohols like methanol.
Fuel cells are different from batteries in that they require a continuous source of fuel and oxygen/air to sustain the chemical reaction whereas in a battery the chemicals present in the battery react with each other to generate an electromotive force(emf). Fuel cells can produce electricity continuously for as long as these inputs are supplied.
Greywater Recycling
Wastewater from all sources in a property (except the toilet) is known as greywater. Most greywater recycling systems collect and treat water from washbasins, baths, and showers, but exclude the more heavily contaminated water from washing machines, dishwashers and kitchen sinks. The systems collect this water and re-use it for purposes that don’t need drinking quality water such as flushing toilets or watering gardens. Greywater systems can be retrofitted and can make up to a 30% reduction in water consumption.
Ground Source Heat Pumps (GSHP)
Ground source heat pumps use the (solar) heat available in the ground as an energy source to provide heating and hot water.
A ground source system is best suited to a newly built property off the mains gas grid, where it can be incorporated into an efficient underfloor heating system. The associated pipework can be placed in a bore hole but is more normally run in a shallow trench over a broader expanse of land. GSHP systems typically operate at temperatures of around 55°C, hence their suitability for water and underfloor heating, low-temperature radiators or fan confection heaters. Ground source heating may also be eligible for the Renewable Heat Incentive.
High Temp Heat Pumps
Ground or air source but use alternative refrigerants such as CO2, to produce temperatures more akin to conventional boilers.
Power Factor Correction (PFC)
Power factor correction aims to reduce the reactive power in an electrical system, bringing the power factor closer to unity (1). This improves overall system efficiency and reduces energy losses.
Rainwater Harvesting
Rainwater Harvesting is the collection of rainwater that would otherwise have been lost and has the potential to save large amounts of mains water and, therefore, reduce the pressure on this increasingly valuable resource. Large surfaces such as roofs or driveways are ideal and can provide up to 100m3 (100,000 litres) of water per year from a medium-sized area. This water can be used to flush toilets, water gardens, and even in certain circumstances to feed white goods that don’t require drinking level water, such as washing machines.
Smart Export Guarantee (SEG)
The Smart Export Guarantee (SEG) is a UK government-backed scheme that allows small-scale renewable energy generators to receive payments for exporting excess electricity back to the National Grid. Launched on January 1, 2020, replacing the previous Feed-in Tariff (FIT) scheme, it requires electricity suppliers to pay small-scale generators for low-carbon electricity exported to the grid. Applies to installations in Great Britain with a capacity up to 5MW (50kW for micro-CHP)
Solar Photovoltaic (PV)
Solar Photovoltaic technology uses the power of the sun year-round to generate electricity. This electricity can be used on-site or at times when it is not needed and sold back to the national grid. Modules are mounted on a roof in a southerly direction and where there is no (or limited) shading. The electricity conversion process causes no waste and no emissions. The solar PV package usually includes panels, roof mountings, inverter, AC and DC isolators, generation meters and connections, etc.
Solar Thermal
Solar Thermal is an effective way of heating some of the water for a property – up to 65% in winter and up to 100% in summer.
What is required is a south-facing orientation on which to place solar collectors. There are two types of solar collectors. Flat panels tend to be the most robust and have a solid flat front that many find more aesthetically pleasing. Evacuated tubes though are thought to be more efficient and weigh less. A solar thermal package is completed with solar storage cylinders, high-temperature pipe insulation, mixing valves and roof lashings.
Variable Speed Drives
Variable-speed drive (VSD) or Adjustable speed drive (ASD) describes equipment used to control the speed of machinery. Many industrial processes such as assembly lines must operate at different speeds for different products. Where process conditions demand adjustment of flow from a pump or fan, varying the speed of the drive may save energy compared with other techniques for flow control. Where speeds may be selected from several different pre-set ranges, usually the drive is said to be ‘adjustable speed’. If the output speed can be changed without steps over a range, the drive is usually referred to as ‘variable speed’.
Voltage Optimisation
Voltage Optimisation technology, where appropriate, can help achieve energy savings of up to 19% by optimising a building’s incoming electricity supply voltage. In the UK the average incoming electricity supply is 242 volts, sometimes as high as 253 volts, whilst most modern electrical equipment is designed and optimised to operate at 220 volts.
A Voltage Optimisation system reduces the voltage down to 220 volts (some systems can maintain this output regardless of incoming voltage), thus bringing the following benefits:
- Reduced site kWh consumption, energy costs and CO2 emissions by up to 19%
- Provides additional protection to electrical equipment from potentially harmful transients.
- Reduces your maintenance costs of electrical equipment, whilst extending the life of all electrical and electronic components.
The effectiveness of VO varies from building to building and depends upon various factors such as your incoming voltage supply, the type of equipment and how it is used. A full analysis of your building is carried out to establish an accurate energy savings projection.
HVAC
Heating, Ventilation and Air Conditioning refers to the collective technologies that provide environmental comfort in a building.
HVAC is critical in the design of medium to large commercial and industrial building to regulate temperature, humidity and fresh air within a building. Simple changes in settings can have significant impacts on energy consumption and, indeed, on how effectively the system operates.
Similarly, installing a more sophisticated system into an older building can provide attractive payback periods whilst improving the comfort levels for the occupants.
LED Lighting
With lighting accounting for an average of 20% – 40% of an organisation’s total energy cost, the latest generation LED (Light Emitting Diodes) lighting for both internal and external applications can reduce your lighting costs by up to 80%. Significantly longer lifespans compared to traditional lighting products also dramatically reduce maintenance costs, often eclipsing the actual energy savings.
Energy Procurement Glossary
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Annual Quantity (AQ)
The estimated annual energy consumption for a site, typically measured in kWh for electricity or therms for gas.
Baseload
The minimum amount of electricity being used during non-operational hours.
Bilateral Energy Trading
Trading where two parties, such as a generator and a supplier, enter into a contract to deliver electricity at an agreed time in the future.
Capacity
The maximum amount of electrical power that can be supplied, usually measured in kilowatts (kW) or megawatts (MW).
Climate Change Levy (CCL)
A tax on energy usage aimed at encouraging users to improve energy efficiency.
Commercial Operation Date (COD)
The date on which a seller notifies a buyer that a generating facility is operating and able to produce and deliver energy under the terms of a commercial contract.
Day-ahead baseload price
The price for electricity contracts traded for physical delivery during the next day.
Distribution Network Operator (DNO)
A company licensed to distribute electricity in the UK. These companies own and operate the cables and towers that bring electricity from the national transmission network to homes and businesses.
Dual Fuel (DF)
An energy contract where a customer obtains both electricity and gas from the same supplier.
Energy broker
An expert who manages the energy buying process on behalf of an organization, leveraging relationships with suppliers to find suitable services.
Energy Imbalance Prices
Also known as “Cashout prices”, these are the System Sell Price (SSP) or System Buy Price (SBP) used to settle the difference between contracted generation or consumption and the actual amount generated or consumed.
Energy procurement consultant
A specialist who analyses an organization’s energy needs, evaluates suppliers, and recommends an optimal energy procurement strategy.
Fixed energy contract
An agreement that locks in a set price per kilowatt-hour for the duration of the contract term.
Estimated Annual Consumption (EAC)
The estimated yearly energy consumption for a meter point, measured in kWh.
Financial PPA
Also known as a Virtual PPA, this type of agreement does not deliver physical electrons to the buyer’s meter; instead, the energy commodity is settled purely financially.
Flexible Product
A contract allowing businesses to control when and how they purchase electricity throughout the contract term, taking advantage of wholesale price movements.
Indexed energy contract
A contract where energy rates directly reflect current market conditions, allowing for potential savings but with less price stability.
Kilowatt-hour (kWh)
A unit of energy equivalent to one kilowatt of power sustained for one hour.
Maximum Demand
The highest peak of energy usage (in kWh) during a specific time period, usually measured in 30-minute intervals.
Megawatt-hour (MWh)
A unit of energy equivalent to 1,000 kilowatt-hours.
Power Purchase Agreement (PPA)
A long-term contract between an energy generator and a buyer, typically used for renewable energy projects.
PPA Price
The fixed price per MWh that the buyer agrees to pay the seller in a Power Purchase Agreement.
Renewable Energy Certificates (RECs)
Tradable, non-tangible energy commodities that represent proof that 1 megawatt-hour (MWh) of electricity was generated from a renewable energy resource.
Renewable Energy Guarantee of Origin (REGO)
Certificates that provide transparency to consumers as to the proportion of electricity the supplier sources from renewable sources.
Settlement Location
The trading hub, pricing node, zone, or other location at which a project will settle financially in a PPA.
Streamlined Energy and Carbon Reporting (SECR)
A UK regulation requiring certain companies to report on their energy use and carbon emissions annually.
Spark Spread
The theoretical gross margin that a gas-fired power plant would achieve by selling a unit of electricity, having bought the fuel required to produce that unit of electricity.
Transmission Network
The network of pylons and cables that transmits higher voltage electricity from power stations to where it’s needed across the country.
System Margin
The margin of error between supply and demand, as managed by the System Operator (e.g., National Grid in the UK).