Energy Bill Calculations

You may have wondered how your energy bill is calculated, especially for gas, which is more complicated. Both electricity and gas are priced in pence per kilowatt-hour (kWh), so multiply the kWh by the price, dividing by 100 to get from pence to pounds.

kWh × Price ÷ 100 = £
1kWh × 20p/kWh ÷ 100 = £0.20

But how do meters measure the kWh used, and what are the basic calculations that the meters carry out to determine the quantity of energy used?

Electricity Calculator Android App

Image of the Calculation Screen on the App

This simple free app calculates the cost of using electrical equipment; you feed in the wattage, hours of use and the price you are paying for electricity.

The app also allows you to look at more advanced factors by switching on Advanced mode in settings to use voltage, VA load and power factor to calculate electrical current.

Get it on Google Play


In the UK, the declared voltage and tolerance for an electricity supply is 230 volts -6%, +10%. This gives an allowed voltage range of 216.2 volts to 253.0 volts. The voltage at your property will vary due to the use of power and normal operation of the power supply network.

Formulae derived from Ohm's Law
Formulae for Power (P), Voltage(V), Resistance(R) and Current(I) derived from Ohm's Law
How do I interpret the chart?

Firstly, note that current is represented by I in the formulae. Taking the inner quadrant, with the V for voltage, as an example, we can say:

Volts = R × I
Volts = P ÷ I
Volts = square root of ( P × R )

All the formulae follow this pattern.

The meter is constantly measuring the voltage and the current passing through the meter. It multiplies voltage measured in Volts by current measured in Amps to get power measured in Watts.

Volts × Amps = Watts
230V × 1A = 230W

The above calculation takes no account of time, so it is an instantaneous measure of power. To get a measure of energy used we need to introduce time, so we use time measured in hours to get kilowatt-hours or kWh.

Volts × Amps × Hours = Watt Hours
230V × 1A × 1 Hour = 230Wh

And then divide by 1,000 to get kilowatt hours.

Volts × Amps × Hours ÷ 1000 = Kilowatt Hours
230V × 1A × 1 Hour ÷ 1000 = 0.23kWh

It is kilowatt-hours that your meter displays as Active Energy or Active Power. A kilowatt-hour is also known as a Unit. Because a Smart Meter can measure power in both directions, it may also indicate IMP or IMPORT to show the power consumed as opposed to the power exported, EXP or EXPORT.


A gas meter simply measures the volume of gas that passes through it. Older gas meters measure the volume in units of 100 cubic feet (ft3) and newer meters in cubic metres (m3). The suppliers' systems hold the meter details and so can accurately calculate the volume of gas used.

Suppliers then have to convert the volume of gas used into kWh for billing. The following equation is used:

Volume × Metric conversion × Calorific Value × Volume Correction ÷ 3.6 = Kilowatt Hours
1m3 × 1 × 39.5 × 1.02264 ÷ 3.6 = 11.2kWh

What do these terms mean, and why are they necessary?

The volume of gas used; measured in cubic metres or hundreds of cubic feet.
Metric Conversion
If you've got a metric meter, you can ignore this step. If your reading is in cubic feet, then a conversion factor of 2.83 must be applied to convert to cubic metres.
Calorific Value

Calorific Value (CV) describes how much heat is generated when a known volume of gas is burned. Suppliers' bills show the value of CV used, which is typically between 37.5 and 43.0 MJ/m3 (Mega Joules per metre cubed).

Diagram showing the 13 Gas Local Distribution Zones
The 13 Gas Local Distribution Zones

Each customer is allocated to a Local Distribution Zone (LDZ). Gas chromatographs monitor the gas composition of the natural gas entering and leaving the LDZ and an average CV is calculated based on these readings and the volume flows into and out of the zone. This is averaged over the 24 hour period and can take a day or two to be finalised.

Your gas supplier then uses these values to calculate your gas bill.

The data for each LDZ can be downloaded via the National Gas website.

Volume Correction
The volume correction factor is used to take into account the temperature, pressure and atmospheric conditions at a property. This factor is typically 1.02264 unless your household has unusual atmospheric conditions. You can usually find this number on your gas bill.
Joules to kWh
We have ended up with Mega Joules from the above calculations. One kWh equals 3.6 million Joules, so we finally divide by 3.6 to get the energy used in kWh.

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(Page updated: 2024-02-08)

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