What does Market-Wide Half-Hourly Settlement mean to you?

The Market-Wide Half-Hourly Settlement (MHHS) is one of the biggest overhauls of our electricity system in this century – no wonder everyone is talking about it. But what does it mean to you?

What is MHHS?

Generators and suppliers trade electricity in half-hourly periods in the wholesale market. Settlement process reconciles the difference between how much suppliers purchase electricity, and how much their customers actually use.

Currently, most consumers are settled on a ‘non-half-hourly’ basis using estimates of when they use electricity, based on a profile of the average consumer usage and their own meter reads. This has been the case for smaller businesses and domestic customers.

Electricity use of largest consumers is already measured in half-hour periods as meters installed at their premises have recorded consumption every 30 minutes and sent the information to suppliers. The amount of electricity consumed and compared with how much is being generated can then be settled every half hour.

However, smart meters are becoming more common, recording actual consumption every half hour. This means the whole electricity market could be settled every half hour.

The basic premise behind the MHHS programme is that smart metering will deliver a more flexible energy system. The settlement process is set to enable suppliers match up trading, expected customer demand and actual usage.

What will MHHS mean to businesses?

Every business is unique when it comes to energy and the practicalities around MHHS are dependent on your metering arrangements.

For example, businesses with Half-Hourly meters currently use Meter Operators (MOPs), Data Collectors (DCs) and Data Aggregators (DAs).

Following MHHS roll-out, these businesses will need to arrange contracts for Metering Services Smart (MSS) or Metering Services Advanced (MSA), as well as Smart Data Services (SDS) or Advanced Data Services (ADS).

Although change can be daunting – especially if you have a large or complex portfolio – this can present an opportunity for your business. Choosing competitively priced services that offer added value in this new era of how electricity is used and accounted for is key.

What is the latest?

Moving every customer on half-hourly electricity consumption – while stepping away from decades of industry practices reliant on estimations and periodic meter readings – is a colossal undertaking for the entire energy industry. 

For example, suppliers must migrate over 33 million Meter Point Administration Numbers (MPANs) onto a new system as part of this transition. MPAN is a unique 13-digit reference number, which identifies each electricity supply point and shows on your electricity bill.

On 29 November, energy regulator Ofgem extended the timeline for getting central systems ready for migrating MPANs by 6.5 months to complete System Integration Testing.

This means suppliers will be able to begin transitioning their meters to the central systems for half-hourly settlement from October 2025.

Other key milestones for the programme will also change, including the cutover to the new settlement timetable, which will now move from December 2026 to July 2027.

What does all this mean in practice?

Sit tight for now. Your supplier will contact you as they receive information from Elexon. The changed dates Ofgem has announced mean this is happening later than expected.