# Energy Source: https://ordergroup.co/glossary/energy/ Last updated: 2026-10-10 > Energy market and device terms for teams buying energy software: demand response, day-ahead trading, PPA, EMS, Modbus and more, with notes from our projects. 25 terms Reviewed 10 October 2026 # Energy software glossary Market, storage and device terms for teams that buy energy software, from demand response and day-ahead trading to the protocols that connect inverters and batteries. Every entry is reviewed by a practitioner who builds these systems: [Paweł Zieliński](https://ordergroup.co/authors/pawel-zielinski/), [Michał Dżaman](https://ordergroup.co/authors/michal-dzaman/), [Karol Oponowicz](https://ordergroup.co/authors/karol-oponowicz/). Writing a specification? Turn these terms into a requirements checklist Add the terms your project touches. We send you, for each one, what it changes in the software you are buying - ready to paste into an RFP. [What we build: Energy Hub](https://ordergroup.co/energy-hub/) ## A - [aFRR](https://ordergroup.co/glossary/afrr/) Automatic frequency restoration reserve aFRR (automatic frequency restoration reserve) is a frequency restoration reserve that the grid operator activates automatically, by sending setpoints from its frequency controller, to bring system frequency back to its nominal value. In Poland it must reach full activation within 5 minutes. ## B - [BESS](https://ordergroup.co/glossary/bess/) Battery energy storage system A battery energy storage system (BESS) stores electricity in rechargeable batteries and releases it to a site or the grid on command. It combines battery racks, a battery management system, power conversion equipment and control software. - [BMS](https://ordergroup.co/glossary/bms/) Battery management system A battery management system (BMS) is the electronics and software that monitor a battery's cells, including voltage, temperature and state of charge, balance them and disconnect the battery when it leaves safe limits. In buildings, BMS can also mean a building management system. ## C - [Capacity fee](https://ordergroup.co/glossary/capacity-fee/) A capacity fee is the charge end users pay to fund a capacity market. In Poland most business users pay it per kWh drawn in peak hours on working days, scaled down when their peak-hour consumption is close to their off-peak consumption. ## D - [Day-ahead market](https://ordergroup.co/glossary/day-ahead-market/) The day-ahead market is a daily auction in which electricity for each 15-minute period of the next day is bought and sold. In Europe orders close at 12:00 CET and one algorithm sets prices for all coupled bidding zones. - [Demand response](https://ordergroup.co/glossary/demand-response/) Demand response is a change in electricity consumption by end users, away from their normal pattern, in reaction to prices or to a paid call from a grid operator or aggregator. It can be offered by one site or by many sites pooled through aggregation. - [Digital twin](https://ordergroup.co/glossary/digital-twin/) A digital twin is a software representation of a physical asset or process, kept in sync with it through live data, so operators can monitor it, simulate changes and sometimes control it without touching the real equipment. - [Dynamic electricity tariff](https://ordergroup.co/glossary/dynamic-tariff/) A dynamic electricity tariff is a supply contract whose energy price follows the spot market, usually the day-ahead price for each hour or quarter-hour. EU law gives every customer with a smart meter the right to such a contract from at least one supplier. ## E - [EMS](https://ordergroup.co/glossary/ems/) Energy management system An energy management system (EMS) is software that reads the meters, inverters and batteries on a site and sends them setpoints, deciding when to charge, discharge, curtail or trade within grid, contract and safety limits. - [Energy cooperative](https://ordergroup.co/glossary/energy-cooperative/) An energy cooperative is a cooperative whose members produce, store and use renewable energy together. In Poland it is a legal form under the Renewable Energy Sources Act with its own settlement of members' energy; in EU law the closest concept is the renewable energy community. - [Energy curtailment](https://ordergroup.co/glossary/energy-curtailment/) Energy curtailment is a deliberate reduction of a generator's output, usually solar or wind, below what it could produce. A grid operator orders it to keep the system balanced or a line within limits, or it is set locally as an export limit at the grid connection. - [Energy procurement](https://ordergroup.co/glossary/energy-procurement/) Energy procurement is how a business buys the electricity and gas it consumes: choosing a contract model, fixing prices through tranches or supplier tenders, and checking the resulting cost, risk and invoices against a budget. - [ETRM](https://ordergroup.co/glossary/etrm/) Energy trading and risk management Energy trading and risk management (ETRM) is the category of software that records energy trades and manages the resulting positions, risk, profit and loss and settlement for companies that buy and sell power, gas or other energy commodities. ## G - [Guarantees of origin](https://ordergroup.co/glossary/guarantees-of-origin/) A guarantee of origin (GoO) is an electronic certificate, with a standard size of 1 MWh, that proves to a final customer that a given quantity of energy was produced from renewable sources. It is issued, transferred and canceled in a national registry and traded separately from the energy. ## M - [Modbus](https://ordergroup.co/glossary/modbus/) Modbus is an open request-response protocol for reading and writing 16-bit registers and single bits in field devices. Inverters, batteries and energy meters use it over serial lines (Modbus RTU) or Ethernet (Modbus TCP). ## N - [NIS2](https://ordergroup.co/glossary/nis2/) NIS2 Directive NIS2 is the EU cybersecurity directive (EU) 2022/2555. It requires essential and important entities, including electricity suppliers, grid operators, producers, aggregators, storage and charge point operators, to manage cyber risk and send an early warning of significant incidents within 24 hours. ## P - [Peak shaving](https://ordergroup.co/glossary/peak-shaving/) Peak shaving lowers the highest power a site draws from the grid, usually by discharging a battery or cutting flexible load during the intervals the network tariff measures, so the site avoids capacity overrun fees or qualifies for a lower network charge. - [PPA](https://ordergroup.co/glossary/ppa/) Power purchase agreement A PPA (power purchase agreement) is a contract under which a buyer agrees to purchase electricity directly from a producer on market terms, usually for several years and often from a named wind or solar plant. ## S - [SCADA](https://ordergroup.co/glossary/scada/) Supervisory control and data acquisition Supervisory control and data acquisition (SCADA) is a class of industrial control systems that collects real-time data from field devices and sensors, presents it to operators and sends control commands to equipment across a plant or network. - [Scope 2 emissions](https://ordergroup.co/glossary/scope-2-emissions/) Scope 2 emissions are the indirect greenhouse gas emissions from generating the electricity, steam, heat or cooling a company buys and consumes. They are usually reported twice: by grid average (location-based) and by the contracts the company chose (market-based). - [Smart meter](https://ordergroup.co/glossary/smart-meter/) A smart meter is an electricity meter that communicates both ways with the network operator's remote reading system, recording interval data such as 15-minute load profiles and accepting commands such as a power limit or disconnection. - [State of charge (SoC)](https://ordergroup.co/glossary/state-of-charge/) State of charge (SoC) is the energy available in a battery, expressed as a percentage of its rated capacity. The battery management system estimates it, and energy software uses it to decide when a battery may charge, discharge or hold a reserve. ## T - [Thermal energy storage](https://ordergroup.co/glossary/thermal-energy-storage/) Thermal energy storage (TES) stores energy by heating or cooling a medium such as water, rock or molten salt, and releases it later as heat, cold or power. It lets a site buy electricity when it is cheap and deliver heat when it is needed. ## V - [V2G](https://ordergroup.co/glossary/v2g/) Vehicle-to-grid V2G (vehicle-to-grid) lets a plugged-in electric vehicle send electricity from its battery back to the grid, not only charge from it. An aggregator pools many vehicles and sells their flexibility on energy and balancing markets. - [VPP](https://ordergroup.co/glossary/vpp/) Virtual power plant A virtual power plant (VPP) is a network of distributed energy resources, such as solar systems, batteries and flexible loads, coordinated by a central control system so that they can be operated and traded as one unit. Free for buyers ## Build your requirements checklist from this glossary 1. Pick the terms Tap the plus on every term your project touches: protocols, regulations, market rules. 2. Get it by e-mail For each term: the definition and what it requires from your software, written by our engineers. 3. Use it in your RFP Paste the requirements into a request for proposal or use them to check what a vendor left out. Commissioning software and the terms are piling up? Talk to an engineer, not a salesperson. 30 minutes, we review your requirements and say what we would build first. [Talk to an engineer](https://ordergroup.co/contact-us/) Requirements checklist For each term we send the definition and what it requires from your software. Free, no sales call needed. Your checklist is empty. Use the plus next to a term to add it.