Unlock Smarter Pricing with Market-wide Half Hourly Settlements

Hello, Champions of Net Zero!

As we edge closer to a pivotal transformation in our energy landscape, the transition towards the Market-wide Half Hourly Settlement (MHHS) regulations set by Ofgem is taking centre stage. This migration is not merely a technical upgrade; it embodies a significant shift towards a more agile, responsive, and sustainable energy framework. With the MHHS initiative, energy managers will gain enhanced control over their consumption patterns, fostering innovation and collaboration, and paving the way for a future where achieving net zero is not just an aspiration, but an attainable reality.

Empowering the Public Sector

This monumental overhaul is set to empower public sector organisations, granting them unprecedented insight into their energy consumption. With the integration of advanced smart meters and the anticipated introduction of innovative time-of-use tariffs, energy managers will be equipped to make informed decisions regarding energy usage. This will not only facilitate a reduction in energy costs but also contribute to greater grid stability.

However, this transition will not be without its challenges. Approximately 30 million meters are slated to migrate to the new MHHS Target Operating Model, with around 2.6 million meters belonging to businesses. Such a large-scale transformation requires meticulous planning and execution.

Understanding MHHS

The Market-wide Half Hourly Settlement (MHHS) represents a significant evolution in the electricity market, designed to support the transition to net zero. By implementing a shorter and more accurate settlement timetable that utilises half-hourly meter readings, the MHHS framework will cultivate a cost-effective electricity system, promote flexible energy usage, and ultimately aid in lowering bills. The MHHS Programme, spearheaded by industry stakeholders, is dedicated to delivering the Target Operating Model as envisioned in the Electricity Settlement Reform Significant Code Review (SCR). Meters will be migrated in phases, with the process dependent on supplier qualifications.

Smart Meters: The Future of Energy Consumption

For nearly fifteen years, smart meters have been replacing traditional gas and electricity meters throughout the UK. These intelligent devices enhance the flexibility of the energy system, boost efficiency, facilitate the transition to renewable energy sources, and contribute to reduced energy consumption. Despite these advantages, convincing customers to adopt smart meters has proven challenging. Current statistics indicate that around 32.4 million smart and advanced meters are in operation across the UK, representing only 57% of the total meter population. This statistic highlights the energy sector’s ongoing efforts to motivate the remaining 43% to upgrade to MHHS-compatible meters.

Key Milestones Ahead

Ofgem has outlined a series of crucial milestones to guide the transition effectively. Here’s a brief overview of the upcoming deadlines that public sector organisations and businesses should be aware of:

• September 2025: The industry must be prepared to modify the Top Line Supply Numbers and migrate meters to ensure half-hour readiness. While no physical meter changes are anticipated at this stage, expect alterations in bill terminology. The migration will occur in two waves.
• March 2026: For meters that cannot be transitioned to half-hour readiness, suppliers will be required to engage with consumers about physical modifications or replacements to align with MHHS standards.
• May 2027: This is the deadline by which all eligible meters must be switched.
• July 2027: The full timeline will conclude, with all meters able to participate in half-hour settlements. All other electricity profile classes (01-04) will be phased out.

A Wealth of Benefits

The advantages of the MHHS initiative are numerous and far-reaching. Perhaps the most significant benefit is the enhanced accuracy and stability it will bring to the energy market. With access to more granular data, energy managers and the broader industry will be able to establish pricing structures that reflect true market conditions. This wealth of data is also expected to spur innovation in product offerings and contribute to a more stable grid.

Becoming Active Contributors to the Energy Landscape

The year 2025 will mark a significant ramp-up in efforts to align pricing and settlements for a more coherent future. Nevertheless, the overall rollout is expected to take a few more years, during which a learning curve will emerge as public sector organisations and the energy industry familiarise themselves with the necessary changes to meter specifications and the implications of the new terminology.

Yet, despite these challenges, the transition to MHHS is undoubtedly a worthwhile endeavour. By embracing this new framework, energy managers will transition from being passive consumers to becoming proactive contributors within a dynamic energy ecosystem. This evolution empowers them to shape their energy futures through participation in dynamic pricing schemes and time-of-use tariffs.

As we stand on the brink of this transformative period, it is essential for those within the public sector to engage actively with the changes ahead. The move towards MHHS is not just an obligation; it is an opportunity to lead the way in sustainable energy consumption and to drive the UK closer to its net zero ambitions.

Stay tuned for more updates on the MHHS transition and how it will impact your organisation. Together, let us embrace this change and champion the path to a sustainable future!

This article originally appeared in the May 2025 edition of Energy Manager magazine. To stay informed and inspired, subscribe to our newsletter for the latest insights on energy management and sustainability.