Annual Quantity
What is Annual Quantity (AQ) in gas?
If two business gas sites use exactly the same amount of gas each year but one is being billed for materially more, the explanation often sits in a single number. Annual Quantity, almost always shortened to AQ, is the UK gas industry’s rolling estimate of how much gas a meter point uses each year. It is expressed in kWh, updated annually by Xoserve, and used as the reference figure across the whole industry. AQ decides what class your gas supply sits in (small, medium, large). It drives the standing charge, the transportation rates, the settlement type, and the kinds of contracts you can buy. A wrong AQ produces a wrong bill. A right AQ keeps everything honest.
AQ is one of the underlying numbers shaping how a business gas contract is priced and metered, alongside the wider classifications used across business energy billing.
On this page
For UK business gas customers, AQ is the headline number that defines the supply on the industry side. Suppliers, shippers, and transporters all work off it. Reviewing it annually is one of the highest-value bits of gas portfolio hygiene because the gap between what AQ says you use and what you actually use turns directly into bill error.
What AQ actually represents
AQ is a rolling estimate of annual gas consumption attached to each Meter Point Reference Number (MPRN) on the UK gas network.
- Expressed in kWh per year.
- Calculated centrally by Xoserve (the gas central data services provider).
- Updated each gas year (1 October to 30 September).
- Used by shippers, transporters, and suppliers across the industry as the reference figure for each meter.
The AQ is not the actual consumption for the year. It is an updated rolling average designed to predict consumption forward, used for industry settlement and charging purposes.
How AQ is calculated
Xoserve recalculates AQ each year using actual meter reading data and a smoothing algorithm:
- The previous 12 months of meter readings provide the base figure.
- Weather correction adjusts for unusually warm or cold conditions in the period.
- A 36-month rolling window smooths year-on-year volatility.
- The result is the updated AQ, applied from 1 October each year.
For sites with consistent consumption, AQ stays close to actual usage. For sites with materially changed consumption (new equipment, change of use, expansion or contraction), AQ lags reality and may need active correction.
AQ classes and thresholds
UK gas meters are classified by AQ into bands that drive settlement and charging.
| Class | AQ range | Settlement type | Typical site |
|---|---|---|---|
| Small (Class 4) | Under 73,200 kWh/year | NDM (non-daily metered) | Small shop, cafe, office |
| Medium (Class 3) | 73,200 to 732,000 kWh/year | NDM | Hotel, restaurant, leisure centre |
| Large (Class 2) | 732,000 to 58.6 million kWh/year | DM or NDM | Larger commercial, light industrial |
| Very large (Class 1) | Above 58.6 million kWh/year | DM (daily metered) | Heavy industrial, manufacturing |
The class determines whether the site is daily metered (DM) or non-daily metered (NDM), the settlement process applied, and the structure of the available gas contracts.
Why AQ matters for your bill
AQ affects several bill components.
- Standing charge. Higher AQ sites pay higher standing charges (proportionally).
- Transportation charges. The capacity element of transportation depends on the AQ band.
- Contract eligibility. Different AQ ranges qualify for different contract types (fixed flat, flex, pass-through).
- Settlement basis. NDM versus DM settlement affects how shortfalls and surpluses are handled.
- Direct debit estimation. Suppliers use AQ to estimate the monthly direct debit before actual consumption data is available.
For mid-size sites near a class boundary, the AQ figure can decide whether a contract structure that would save money is available.
Worked example of wrong AQ
To make the impact concrete, here is an illustrative example. Imagine a mid-size hotel that historically consumed 500,000 kWh per year of gas. Two years ago it installed a 200 kW air-source heat pump and switched most of its space heating to electricity. Actual gas consumption dropped to 200,000 kWh per year. Its AQ, calculated on the 36-month rolling window, still reads around 350,000 kWh (somewhere between old and new).
| Bill component | Billed on AQ = 350,000 | Actual at 200,000 consumption | Overcharge per year |
|---|---|---|---|
| Standing charge (proportional to AQ band) | ~£1,200 | ~£700 | £500 |
| Transportation capacity charges | ~£3,000 | ~£1,700 | £1,300 |
| Direct debit calibration | Over-collecting | Settling correctly | Cash flow impact |
Example only. Real impact varies by supplier, LDZ, contract structure, and tariff. The point is the principle. A stale AQ produces a stale bill until it is fixed.
The fix in this example is a customer-initiated AQ correction request. Submit a recent actual meter reading and ask the supplier to push the data to Xoserve for a recalculation. The AQ updates in 4 to 8 weeks. Charges fall to match real consumption from the next bill onward, with most suppliers crediting back the overcharged period.
How and when AQ changes
AQ updates happen on three triggers.
- Annual recalculation. 1 October each year, applied automatically by Xoserve based on the previous gas year’s readings.
- Change of Tenancy. A new occupier’s usage can prompt a fresh AQ as readings are taken under the new account.
- Manual correction. Where AQ is materially wrong, the customer can request an AQ correction through the supplier or directly to Xoserve.
Manual AQ corrections are common after equipment changes (heat pump retrofits, biomass conversions, change of operations) that materially change consumption.
When AQ is wrong
AQ is often wrong on sites where consumption has changed materially. Common scenarios.
- Site closed or partially closed. AQ still reflects pre-closure usage. Standing and transportation charges are inflated.
- Heat pump retrofit. Gas demand drops sharply. AQ lags by a year or more.
- Process change. Manufacturing converted to a less gas-intensive process. AQ stays high.
- Building extension. Gas demand rises. AQ is too low, undercharging in the short term but causing catch-up charges later.
Customers can submit corrected meter readings and request an AQ recalculation outside the normal annual cycle. Suppliers and shippers usually act on these requests within 4 to 8 weeks.
How to check whether your AQ is right
A simple 10-minute check that catches most AQ problems.
- Find your AQ on your most recent gas bill or supplier portal.
- Add up the actual consumption shown on your last 12 months of bills (using actual reads where possible, ignoring estimates).
- Compare the two figures.
- If they are within 10 per cent of each other, AQ is healthy.
- If the gap is wider than 10 per cent, request an AQ correction.
For multi-site portfolios, do the same exercise on a sample of sites each quarter. Sites that show material gaps usually benefit from a correction request. Sites with consistent gaps year after year may need to be reviewed for meter or read-collection issues rather than AQ alone.
Where to find your AQ
The AQ for your gas meter is shown in several places.
- Your gas bill. Usually in the meter data section. Look for “AQ”, “Annual Quantity”, or “Estimated annual usage”.
- Your supplier’s portal. Available in the supply details for the MPRN.
- Xoserve. Suppliers and shippers can request the current AQ directly from Xoserve through industry data systems.
- A broker. A broker with Letter of Authority can pull the AQ along with other meter data when quoting your supply.
The figure should be the same across all these sources within a few days of any update.
Practical implications for businesses
For UK business gas customers, AQ is worth checking at three points.
- At contract renewal. Confirm AQ matches your actual annual consumption. A mismatch can produce a contract priced for the wrong size of supply.
- After material operational changes. Any equipment swap, building change, or change in operating hours that materially affects gas demand should prompt an AQ review.
- After unexpected bill swings. If standing or transportation charges jump without obvious cause, an AQ change is one of the first things to check.
Related entries. MPRN, Local Distribution Zone (LDZ), daily metered gas, non-daily metered gas, Xoserve, bill validation.
For the multiplier that turns the meter’s cubic metres into the kWh used in AQ calculations, see the gas conversion factor.
Frequently asked questions
What is Annual Quantity (AQ) in gas?
The UK gas industry’s rolling estimate of how much gas a meter point uses each year, expressed in kWh. AQ drives meter classification, settlement, transportation charges, and contract eligibility.
How is AQ calculated?
Xoserve recalculates AQ each year using the previous 12 months of meter readings, weather-corrected and smoothed across a 36-month rolling window. The result applies from 1 October.
What are the AQ classes for UK gas?
Small (under 73,200 kWh/year), Medium (73,200 to 732,000), Large (732,000 to 58.6 million), and Very large (above 58.6 million). The class determines NDM versus DM settlement and contract structures.
Why does my AQ matter for my bill?
AQ affects the standing charge, transportation capacity charges, contract eligibility, settlement basis (NDM versus DM), and supplier direct debit estimation. A wrong AQ produces wrong charges across all of these.
When does my AQ update?
Automatically on 1 October each year via Xoserve. Also on a Change of Tenancy and on customer request following material consumption changes.
Where can I find my current AQ?
On the gas bill (meter data section), in the supplier portal, from Xoserve via industry data systems, or via a broker with Letter of Authority.
What is the difference between AQ and SOQ?
AQ is the annual quantity (kWh/year). SOQ (Supply Offtake Quantity) is the maximum daily quantity (kWh/day) on larger sites. AQ drives annual settlement and charging; SOQ drives daily balancing and capacity charges on larger supplies.
How do I correct an inaccurate AQ?
Submit a corrected meter reading and an AQ correction request through your supplier. The supplier passes it to Xoserve, which recalculates. The process typically takes 4 to 8 weeks.
Does my AQ change when I switch supplier?
No. AQ is a property of the meter point, not the supplier relationship. The new supplier inherits the same AQ for billing and contract setup.
What happens to AQ after a change of tenancy?
The AQ stays with the meter. The new occupier inherits the existing AQ until enough new readings have been collected (typically 12 months) to recalculate based on the new pattern of use.
Does AQ apply to electricity?
No. AQ is a gas-specific concept. The electricity equivalents are EAC (Estimated Annual Consumption) for non-half-hourly supplies and direct half-hourly data for HH supplies.
What if my AQ is too low?
The supplier’s direct debit is calibrated to the AQ, so an AQ too low produces low direct debits and an eventual catch-up bill when actual usage is settled. Request an AQ correction to avoid the surprise.
How big a gap between AQ and actual consumption is acceptable?
A rule of thumb is that AQ within 10 per cent of actual annual consumption is healthy. Gaps above 10 per cent typically warrant an AQ correction request, particularly where consumption has been stable for several months.
Does AQ correction credit back historic overcharges?
Most suppliers credit back the overcharge from the date the corrected AQ takes effect, which is normally the date the corrected reading was submitted. Backdated credits beyond that date are negotiated case by case and tend to require documentary evidence of the consumption change.