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Energy jargon buster: Your energy glossary from A to Z

Collage of a woman walking a power cord attached to a green leaf.

Every find it annoying when you're trying to read your electricity bill, only to get stuck at all the confusing terminology? Nothing worse than paying for something you don't understand!

To help you sail through the maze of complicated terms and acronyms, we’ve created this handy jargon busting cheat sheet so that you’ll be able to talk KWh and PVs with the best of them!

Energy industry buzzwords

Let’s begin with the energy industry terms that you’re likely to hear in conversations or read in news articles. Read through this list and don’t feel left out next time someone’s passionately discussing ways to reduce their carbon offset:

Biofuel: This is a kind of fuel that is derived from living matter, for e.g. biogas, which is methane derived from animal manure and other digested organic material. Biofuels are considered a cleaner source of energy and using these instead of fossil fuels is a way of reducing greenhouse gases.

Carbon footprint: This is defined as the impact of greenhouse gas emissions resulting from a person, product, business or event on the environment. Greenhouse gases can be emitted through a number of sources including transport, land clearance and the production and consumption of food, fuels and manufactured goods.

Carbon offset: This describes a way in which you can balance out your carbon footprint by sponsoring projects or schemes designed to reduce carbon emissions.

Cogeneration: When a single fuel source is used to generate electricity as well as thermal energy, the process is referred to as cogeneration. Also known as Combined Heat and Power, the process uses waste heat energy produced by the generator. Cogeneration can be up to 80% more efficient than conventional energy sources and produce around 60% less carbon emissions.

Dual fuel: When you source your gas and electricity both by the same provider, it means you are making use of a dual fuel service.

Feed-in tariff: This is the rate paid for the electricity that is pumped back into the power grid from a renewable energy source like your rooftop solar panel system. In simple words, solar panels sometimes generate more electricity than what you can use at your home. Instead of letting this clean energy go waste, you can send it back to the electricity grid and earn credit on your energy bill. Check out this article to learn more about feed-in tariffs.

Fossil fuel: These are fuels that are formed naturally over millions of years through processes like the decomposition of dead plants and animals. Fossil fuels contain high levels of carbon and include coal, petroleum and natural gas. The use of fossil fuels to generate electricity, leads to an emission of greenhouse gases into the atmosphere, which is harmful for the environment.

National Electricity Market (NEM): This is the Australian wholesale market for the supply of electricity to retailers and end users in the regions of QLD, NSW, ACT, Victoria, South Australia and Tasmania, which began operating in December 1998.

Photovoltaic (PV) systems: A photovoltaic solar system is a way of generating renewable energy by using semiconductors to produce an electric current when it is exposed to sunlight. Such a system comprises multiple components such as solar cells or solar panels. If you’re interested in installing a solar system to your property, check out our guide for more details on how to generate solar energy at home.

Renewable energy: Renewable or sustainable energy refers to energy that is generated from a power source that can be replenished naturally, for example sunlight, wind, water and biomass instead of fossil fuels like coal or natural gas. Renewable sources are not carbon-based, which means they don’t release greenhouse gases into the atmosphere making them safer for the environment. For more questions on clean energy and plans, read our renewable energy guide.

Renewable Energy Target (RET): This is a Federal Government policy designed to ensure that at least 33,000 Gigawatt-hours of the country’s electricity comes from renewable sources by the initial target of 2020. Post-2020, the RET has become a yearly target that will remain at 33,000 Gigawatt-hours until 2030. RET also offers an incentive to deploy sustainable sources of energy as part of the response to climate change.

Energy bills and plans terminology

Here’s another list of words that you’d often come across on your gas or electricity bills or contract. Read ahead to understand the terms of your energy service better:

Bill smoothing: Instead of letting electricity and gas costs pile up over an entire quarter, many energy providers give their customers the option to spread the estimated yearly cost of their service across equal monthly, fortnightly or weekly payments. This process of bill smoothing can be a helpful method to manage the household budget better. Read more on how bill smoothing amounts are calculated.

Carbon offset programs: Energy providers may offer carbon offset programs to customers in which a portion (or all) of their energy usage is matched in carbon credits that support renewable energy programs.

Conditional discount: Energy providers offer a number of discounts that you could be eligible for if you fulfil a certain condition. For instance, a common conditional discount deal is related to paying your bills on schedule. So if you sign up for a pay on time discount, every time you make a payment on time, you are eligible for a discount.

Default Market Offer (DMO): The default market offer (DMO) is a price cap imposed by the Australian Energy Regulator (AER) that energy retailers must follow.

Distributor: Your energy distributor is the company that is responsible for providing power or gas to your property. They own and maintain the distribution networks including the power lines, poles, wires and gas pipelines that carry the gas and electricity to your home or business. Every area has its own fixed energy distributor and while you can choose your energy provider, you don’t have the flexibility to change your distributor.

Guaranteed discount: This refers to an offer where you are guaranteed a certain amount of discount. For example, a sign up deal of $50 off on your first bill.

Hardship plan: Apart from the concession schemes provided by the government, many energy providers also have programs to help residential customers facing financial difficulty. Commonly known as the hardship plan, there are a number of options for consumers depending on the kind of assistance they require. For example, there could be a provision for a short term extension to pay the bill or an arrangement where the customer can pay bills by making regular instalments over a period of time.

Joules: A joule is a unit of measuring energy. One kilojoule (kJ) in turn, is equivalent to 1000 joules.

Kilowatt (kW): This is a unit of electric power, equal to 1000 watts (where a watt is a unit that measures the rate of energy conversion). A Megawatt (MW) refers to a million watts.

Kilowatt hours (kWh): This refers to another measure of energy. If energy is being consumed at a constant rate over a period of time, the total energy in kilowatt-hours is the product of the power in kilowatts and the time in hours. Your electricity usage is generally measured in KWh.

Megajoule: A megajoule (MJ) is equivalent to one million joules (see above). Your gas usage is generally measured in megajoules.

MIRN: The full form of MIRN is Meter Installation Reference Number. This is a number that is used to identify the gas meter at your property.

NMI: The NMI stands for the National Meter Identifier, which is a number used to identify the electricity meter at your property. Your bill will detail your NMI.

Read type - actual or estimate: Your energy meter reading tells how much energy you have used in a certain time period and is therefore an important factor for calculating your usage charges (see below). If your distributor is not able to access your energy meter, you may get a bill with an ‘estimated’ reading instead of an ‘actual’ reading. To make sure you are not charged extra based on any estimated bills, you need to make sure your distributor has easy access to the meter.

Reference price: The reference price is a result of the DMO coming into effect and acts as a reference point for customers when comping energy plans. Retailers will inform customers how their prices compare to the reference price through a percentage.

Retailer: Your energy retailer or provider is the company that bills you for the energy supplied to your home from the energy grid. This is the company that offers you different plans and deals for your electricity and gas accounts. In many states in Australia, where the energy market is deregulated, for example, NSW, VICand SA, customers can choose who their energy retailer is and switch between providers and plans best suited to their needs.

Smart meters: A smart meter is a digital device that uses latest technology to measure and record your electricity usage every half an hour. One of the best features of a smart meter is that it automatically sends electronic meter readings to your energy provider. This means that there’s no need for someone to physically visit your property’s meter, thereby eliminating the risk of erroneous or estimated readings.

Supply charge: This is a fee that energy customers pay to have electricity delivered to their home. It covers the poles and wires and is priced at a per day rate.

Tariff: Your energy tariff refers to the pricing plan that your provider charges you for your energy consumption. It is generally made up of two components, the supply charge, which is a fixed cost, and the usage charge, which depends on the amount of energy you use. Tariffs can vary depending on your retailer, your distributor and if you are on a government regulated plan.

Time-of-use plans: A time-of-use plan also known as a flexible pricing plan, refers to a tariff scheme where customers are charged different rates for using electricity during peak, shoulder and off peak time slots. As per this plan, you have to pay higher rates for using electricity at peak times, lower rates during the shoulder period and the lowest rate during off-peak hours. This kind of a tariff plan is best suited to people who regularly use electricity in non-peak times, or have the option to change their energy usage behaviour to non-peak periods.

Usage charge: This is a fee that gets charged per kilowatt hour of usage. The amount you pay depends on the type of meter that is installed at your home.

Victorian Market Offer: Similar to the DMO, the VMO is a default offer for energy customers in Victoria. One difference between the DMO and the VMO is that the VMO is available to all Victorians, not just those who were on standing offers.

Ready to put your knowledge to the test? Head on over to our energy comparison tool to start comparing some of the plans available in your area. 


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Cooper Langby
Cooper Langby
Money writer

Cooper is a double-degree graduate covering Energy and Broadband here at Mozo.

Evlin DuBose
Evlin DuBose
Senior Money Writer

Evlin, RG146 Generic Knowledge certified and a UTS Communications graduate, is a leading voice in finance news. As Mozo's go-to writer for RBA and interest rates, her work regularly features in Google's Top Stories and major publications like