Energy terms explained

Where the average costs of producing a good or providing a service falls as output increases.

A type of tariff that has different unit rates for consumption during the day and during the night. The number following Economy refers to the number of hours for which night-time rates are available.

A communication from a supplier to a consumer, indicating that the fixed term period of the consumer’s energy supply contract is due to expire, and setting out the arrangements that the consumer will default to and the options available to the consumer to act in response to this notification.

The use of gas and/or electricity as a source of heat and power. Usage is measured by an energy meter.

The device used to record how much gas and/or electricity is used.

An energy company licensed by Ofgem to supply gas and/or electricity.

This is the company your pay for your energy usage. They buy energy in the wholesale market and sell it on to customers. You can shop around and choose who your energy supplier is.

When we talk about or publish data on energy suppliers, we sometimes classify them by their share of customers in the retail market:

• Small suppliers: hold less than 1% of the market in both fuels (gas and electricity)
• Medium suppliers: hold less than 5% of the market in both fuels (gas and electricity) and 1% or more in a single fuel (gas or electricity)
• Large suppliers: hold 5% or less of the market in at least one fuel (gas or electricity)
• Large legacy suppliers: have held at least 5% of the market in either fuel since the government transferred the ownership of gas and electricity from public to private ownership in the 1980s.

Tariffs are what energy suppliers charge you for gas and electricity. If you don't know what your energy tariff is, contact your energy supplier or check your last energy bill. 

You can find your supplier's contact details on your gas or electricity bill. If you don’t know who your supplier is see Who is my gas or electricity supplier?

You should talk to your supplier or look at their website to see what tariffs they have available and if you can pay less. You can also use a price comparison website to see if another supplier can offer you a better tariff. A list of Ofgem approved online comparison services are available at Ofgem Confidence Code.

If you’ve never switched energy supplier or have switched only once, you’re likely to be on a more expensive ‘default’ tariff. Default tariffs, including standard variable tariffs, are a basic tariff from an energy supplier. Find out about the default tariff price cap

A prepayment meter tariff means you pay upfront for your gas or electricity use. You can ‘top up’ using an app on your phone, by text or through a token or key card at a shop. Find out about the prepayment tariff price cap

These are the costs of government programmes to save energy, reduce emissions and encourage take up of renewable energy. They also include the cost of social programmes like the Warm Homes Discount.

Find out more about these at Environmental and social schemes

When an energy supplier tries to take over a gas or electricity supply by mistake. As a customer, you’re protected by the ‘Erroneous Transfer Customer Charter’. This is outlined in the electricity Meter Registration Agreement and gas Supply Point Administration Agreement industry codes. All energy suppliers must follow the charter. You could get compensation if this happens to you.

Estimate of the amount of energy used in a particular period of time, for example over the last three months.

The estimated cost of energy to a consumer over a 12 month period, based on a specified methodology and the best available information about that consumer’s consumption.

A tariff which is for a period of an indefinite length and which does not contain a fixed term period.