The Market-Wide Half-Hourly Settlement Programme (MHHS)

The energy sector in Great Britain is undergoing a transformative shift with the introduction of the Market-Wide Half-Hourly Settlement (MHHS) Programme. Formally approved by Ofgem in April 2021, this programme represents a significant step forward in the drive towards a smarter, more flexible energy system. As the nation seeks to achieve Net Zero by 2050, the MHHS plays a crucial role in enabling this transition, offering substantial financial, environmental, and operational benefits to business customers.

 

What is Half-Hourly Settlement?

At its core, the MHHS Programme is about improving how energy consumption is measured and settled. Traditionally, energy suppliers have relied on profiled energy data based on periodic meter readings. This approach, while effective in the past, lacks the detail needed to truly understand energy usage patterns. Under the existing system, Non-Half Hourly (NHH) customers are charged based on estimated consumption, which is derived from daily or monthly meter readings. These readings are then applied to a standard profile curve to estimate energy use throughout the day.

The introduction of Half-Hourly (HH) settlement changes this by allowing energy suppliers to capture and use actual energy consumption data every 30 minutes. This shift from estimated to actual data will enable more accurate billing, reduce imbalance costs, and allow businesses to better understand their energy consumption habits.

 

The Benefits of MHHS

The financial implications of the MHHS Programme are significant. Ofgem estimates that the programme could provide net financial benefits to GB energy consumers ranging between £1.5 billion and £4.5 billion by 2045. These savings will be achieved through several key benefits:

  1. Increased Energy Efficiency. By having access to detailed, half-hourly data, businesses can better manage their energy usage, identify inefficiencies, and reduce waste. This increased visibility will help companies make informed decisions about when and how to use energy, potentially shifting their consumption to periods when electricity is cheaper.
  2. Innovative Tariffs and Solutions: The granular data provided by HH settlement will enable energy suppliers to develop innovative tariffs that better reflect the true cost of electricity. This could include time-of-use tariffs that incentivize businesses to consume energy during off-peak hours, or vehicle-to-grid (V2G) solutions that allow electric vehicles to feed energy back into the grid during high-demand periods.
  3. Supporting the Energy Transition: MHHS is a key enabler of the broader energy transition. By incentivising a move towards a smarter, more flexible energy system, the programme supports the decarbonisation of the UK’s electricity supply. This aligns with the government’s Net Zero ambitions and helps businesses contribute to a more sustainable future.

Impact on Business Customers

For business customers, the transition to HH settlement represents both opportunities and challenges. On the one hand, the increased accuracy of billing will allow businesses to better understand their energy consumption patterns and carbon footprint. This, in turn, can lead to cost savings and a more efficient use of resources.

On the other hand, the transition will require businesses to adapt to new ways of managing their energy consumption. All NHH metered supplies will eventually migrate to HH settlement, with the first set of customers expected to transition in Q2 2025. By December 2026, the migration is anticipated to be complete. During this period, businesses will need to ensure they have the appropriate HH-enabled metering in place. Where smart or Automated Meter Reading (AMR) devices are not available, load shaping services will be used to estimate consumption.

 

The Road Ahead

While the transition to HH settlement may present some initial challenges, the long-term benefits for business customers and the broader energy industry are clear. Improved data accuracy and visibility will enable businesses to make more informed decisions about their energy use, helping them to reduce costs and contribute to the UK’s Net Zero goals.

As we and others who are passionate about energy continue to develop new services and solutions in response to the MHHS, businesses will have more opportunities than ever before to optimise their energy consumption. By embracing these changes, companies can not only reduce their operational costs but also play a vital role in the nation’s energy transition.

 

Article written by Ben Chamberlain, Head of Operations