Energy Management Glossary

Key Terms

When it comes to energy management, there are many terms to know. Below we have created a glossary of terms that can be helpful when looking at your facilities, from batteries to software and even incentives such as the IRA. Here are the terms and acronyms to know when working with energy storage:

BESS | Battery Energy Storage System

A system that stores electrical energy in batteries for later use, often at grid or commercial scale. 

ESS | Energy Storage System 

Broad term for any system that captures energy and releases it on demand; includes batteries, flywheels, pumped hydro, etc.

LFP | Lithium Iron Phosphate

A lithium-ion battery chemistry (LiFePO4) favored for BESS due to its safety, long cycle life, and thermal stability.

NMC | Nickel Manganese Cobalt

A lithium-ion battery chemistry offering high energy density; common in EVs and some stationary storage applications.

NCA | Nickel Cobalt Aluminum

High-energy lithium-ion chemistry with good power output; used in EVs and some stationary applications.

LTO | Lithium Titanate Oxide

Battery chemistry with very fast charge/discharge and long cycle life, but lower energy density; used in fast-response grid apps.

VRB/VRFB | Vanadium Redox Flow Battery

Flow battery using vanadium electrolytes; highly scalable with long-duration capability and no degradation from deep cycling.

AAM | Active Anode Material

Graphite-based material used in lithium-ion battery anodes; subject to AD/CVD investigation in 2025 targeting Chinese imports.

SoC | State of Charge

The current energy level of a battery expressed as a percentage of full capacity (0-100%).

SoH | State of Health 

A measure of a battery's condition relative to its original specifications, typically expressed as a percentage.

SoE | State of Energy

Energy available in a storage system at a given moment; accounts for round-trip efficiency losses unlike SoC alone.

DoD | Depth of Discharge

The percentage of a battery's capacity that has been used; deeper DoD generally reduces cycle life.

RTE | Round-Trip Efficiency

The ratio of energy output to energy input over a full charge-discharge cycle; key metric for storage economics.

C-rate | Charge/Discharge Rate 

A measure of how fast a battery is charged or discharged relative to its capacity (e.g., 1C = full charge/discharge in 1 hour).

PCS | Power Conversion System

Bidirectional inverter/converter that interfaces the battery DC to the AC grid; manages

charge and discharge.

BMS | Battery Management System

Electronics and software that monitor and control cell voltages, temperature, SoC, and

safety of a battery pack.

EMS | Energy Management System

Software platform that optimizes dispatch, scheduling, and control of energy storage and generation assets.

SCADA | Supervisory Control and Data Acquisition

Industrial control system used to monitor and operate BESS and grid assets remotely in real time.

PV | Photovoltaic

Solar technology that converts sunlight to electricity; commonly co-located with BESS in hybrid projects.

DC Block

A pre-assembled battery module and inverter unit forming the building block of a utilityscale BESS system.

AC-Coupled 

A BESS configuration where the battery connects to the AC side of an inverter; flexible but slightly less efficient than DC-coupled.

DC-Coupled

A BESS configuration where the battery and solar share a single inverter on the DC bus; more efficient for co-located PV+storage.

LDES | Long-Duration Energy Storage

Storage systems capable of discharging for 8+ hours; includes flow batteries, pumped hydro, and iron-air batteries.

CAES | Compressed Air Energy Storage 

Large-scale storage that compresses air into underground caverns and expands it through turbines to generate power.

PHES | Pumped Hydro Energy Storage

The most deployed form of grid storage; pumps water uphill to store energy, releases it through turbines to generate power.

MW/MWh | Megawatt / Megawatt-Hour

MW = power capacity (rate of charge/discharge). MWh = energy capacity (total storable energy). Both are critical BESS specs.

GW/GWh Gigawatt / Gigawatt-hour

Larger unit of power/energy; used for grid-scale or national storage capacity figures (1 GW = 1,000 MW).

LCOE | Levelized Cost of Energy

The average lifetime cost of generating one unit of electricity from a project; used to compare technologies.

LCOS | Levelized Cost of Storage

The cost per MWh discharged over the lifetime of a storage asset; the storage-specific equivalent of LCOE.

ITC |  Investment Tax Credit 

US federal tax credit applied to the capital cost of eligible energy storage projects (currently 30% under IRA).

PTC | Production Tax Credit

US federal tax credit based on energy produced; applies to domestically manufactured battery cells ($35/kWh under IRA).

IRA | Inflation Reduction Act

US 2022 legislation providing major tax incentives for clean energy including battery

storage; extended ITC to standalone BESS.

CapEx | Capital Expenditure 

Upfront investment cost of building a BESS project (equipment, installation, interconnection, etc.).

OpEx | Operating Expenditure 

Ongoing costs of running a BESS project (O&M, insurance, land lease, software, etc.). IRR Internal Rate of Return Finance-Policy The annualized return rate that makes a project's NPV equal to zero; key metric for BESS investment decisions.

NPV | Net Present Value

The present value of future cash flows minus initial investment; used to evaluate BESS project economics.

AD/CVD Anti-Dumping and Countervailing Duties 

Trade remedies imposed on imported goods sold below market price or subsidized by foreign governments.

Section 301 | Section 301 Tariff 

US tariff authority under the Trade Act of 1974; used to impose duties on Chinese imports including battery cells and parts.

IEEPA | Intl Emergency Economic Powers Act

US law invoked by Trump to impose emergency tariffs on China and other countries in 2025.

SGIP | Self-Generation Incentive Program 

California incentive program providing rebates for behind-the-meter energy storage and other self-generation technologies.

PPA | Power Purchase Agreement

Long-term contract where a buyer agrees to purchase electricity (or storage services) from a project at a fixed price.

EPC | Engineering, Procurement & Construction

A contract or contractor responsible for the full design, equipment sourcing, and construction of a BESS project.

O&M | Operations and Maintenance

Ongoing services to operate, monitor, and maintain a BESS system post commissioning.

OEM | Original Equipment Manufacturer 

The manufacturer of BESS hardware (cells, modules, inverters); distinct from the system integrator or developer.

RFP | Request for Proposal 

A procurement document issued by a buyer seeking bids from BESS suppliers or EPC contractors.

COD | Commercial Operation Date

The date on which a BESS project begins commercial operations and is eligible to earn revenue.

NTP | Notice to Proceed

A formal instruction from the project owner to the contractor to begin construction activities.

C&I | Commercial and Industrial

Segment of the BESS market serving commercial or industrial customers for demand charge management and backup power.

NEM | Net Energy Metering

A billing arrangement where distributed solar or storage owners receive credit for excess energy exported to the grid.

CCA | Community Choice Aggregation

A program allowing local governments to procure electricity on behalf of residents, often including storage and renewable contracts.

Merchant | Merchant Storage

A BESS project that earns revenue from wholesale energy and ancillary service markets without a long-term offtake contract.

Capacity Mkt | Capacity Market

A wholesale market where generators and storage earn payments for committing to be available during peak demand periods.

ISO | Independent System Operator

A neutral entity that manages the transmission grid and wholesale electricity market in a region (e.g., CAISO, ERCOT, MISO).

RTO | Regional Transmission Organization

Similar to an ISO; it manages grid reliability and wholesale markets across a multi-state region (e.g., PJM, SPP).

CAISO | California ISO

The independent system operator managing California's bulk electric grid and power market.

ERCOT | Electric Reliability Council of Texas

ISO that manages most of Texas's grid; a major BESS market known for merchant storage opportunities.

PJM | PJM Interconnection 

RTO serving 13 US states and DC; one of the largest wholesale electricity markets in the world.

MISO | Midcontinent ISO

RTO covering the US Midwest and part of Canada; growing market for utility-scale BESS.

NERC N. | American Electric Reliability Corp.

Organization that develops and enforces reliability standards for the bulk power system in North America.

FERC | Federal Energy Regulatory Commission

US federal agency regulating wholesale electricity markets, transmission, and interstate energy infrastructure.

AGC | Automatic Generation Control

System that automatically adjusts generator or storage output to maintain grid frequency within target range.

FFR | Fast Frequency Response

Very rapid injection or absorption of power (within milliseconds to seconds) to arrest sudden frequency deviations.

FCR | Frequency Containment Reserve

European grid service requiring storage to respond within 30 seconds to frequency deviations to stabilize the grid.

aFRR | Automatic Frequency Restoration Reserve

Automated grid balancing service that restores frequency to nominal after a disturbance; follows FFR/FCR.

mFRR | Manual Frequency Restoration Reserve

Manually activated reserve to restore frequency and energy balance, typically within 15 minutes.

FR | Frequency Regulation

Grid ancillary service where storage rapidly adjusts output to keep grid frequency at 60 Hz (US) or 50 Hz (EU).

AS | Ancillary Services

Grid services beyond energy supply that support reliability: frequency regulation, spinning reserve, voltage support, etc.

Spinning Res. | Spinning Reserve

Generating or storage capacity that is online and synchronized to the grid, ready to respond within 10 minutes.

Non-Spin Res. | Non-Spinning Reserve

Capacity not currently online but able to respond within 10-30 minutes; BESS can often qualify from a standstill.

T&D | Transmission and Distribution

The network of high-voltage lines (transmission) and lower-voltage wires (distribution) delivering power to customers.

VPP | Virtual Power Plant

A network of distributed energy resources (including BESS) aggregated and dispatched as a single grid asset.

DER | Distributed Energy Resource

Small-scale power generation or storage located close to the point of use (rooftop solar, home batteries, EV chargers, etc.).

Interconnection Agreement

A contract between a generator/storage project and the utility/ISO governing technical and commercial terms for grid connection.

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