Your Guide to Understanding Market Wide Half Hourly Settlement
August 2024
The Market Wide Half Hourly Settlement (MHHS) programme has been called the most significant change to how the wholesale electricity market is settled since the introduction of the non-half-hourly (NHH) market back in 1998. This article aims to provide an overview of what is happening and how the inevitable changes will impact your business.
What is MHHS?
MHHS will see all business customers move to half-hourly (HH) settlement of their electricity consumption, meaning every 30 minutes, your electricity consumption will be recorded and used to calculate your monthly invoice. Currently, around 400,000 non-domestic customers have half-hourly meters, whereas ~2.3 million customers are non-half-hourly settled, illustrating the sheer scale of the programme. The timescales for industry to deliver MHHS starts in April 2025 and runs through 2026. All Suppliers will be working on various delivery programmes before this time.
Why is it happening?
MHHS is deemed as a key enabler for a smarter, more flexible energy system and is vital in assisting the United Kingdom with its Net Zero ambitions. By providing half-hourly visibility of consumption, the programme aims to change consumer behaviour, by reducing demand on the grid at peak times when electricity is most expensive and polluting.
What will change?
There are a number of changes as a result of the programme, other than the obvious change that invoices will be calculated on HH data. As with any change within the industry, there will be a number of new classifications to learn and the corresponding abbreviations.
MHHS will reclassify the types of meter to either be called Advanced or Smart based on the below allocation:
Depending on whether you are Advanced or Smart, your meter will be subject to the new metering agent names and abbreviations shown below, moving away from the Meter Operator (MOP) and Data Collector (DC) that we are currently familiar with:
What will you have to do?
Nothing! MHHS is a programme that is Supplier led, therefore no mandated steps need to be taken by customers. However, where you have existing NHH ‘dumb’ meters it would be in your interest to move to a Smart or AMR meter so that you can gain the benefits of half-hourly settlement, especially when you will be paying for the associated MHHS Agent costs highlighted above.
What happens if I don’t get an AMR or a Smart Meter for my existing NHH Meter?
Changing to an AMR or Smart Meter is not mandatory under the programme. If you choose to stay on a ‘dumb’ NHH meter your meter will be allocated a site-specific half hourly load profile against which your consumption will be settled. This is different to the current NHH process, where you would be settled against a generic profile class.
What will it cost?
MHHS has three key cost components that will vary compared to the current market:
- Time of use – you will now be invoiced the cost of your electricity based on the actual cost of each half-hour (HH) of consumption. This could lead to higher or lower costs initially, but by having the HH visibility of when you consume and how much it costs, it will allow you to amend consumption accordingly.
- Metering Agents – Traditionally the cost of MOP and DC was not transparent for NHH customers and simply built into your unit rate. MHHS will align NHH meters to the way HH meters currently operate, with transparency of price and the ability to shop around for the best provider. At present, there is no guidance on the costs of the new MHHS Agents, although these are expected to increase inline with current HH metering charges.
- NHH – Those who remain on "Dumb" NHH will now be settled on an allocated site-specific profile. There will be winners and losers from this change, but the costs should be more reflective of your site’s actual usage.
What is the benefit?
The ultimate benefit of MHHS to customers is the ability to reduce the amount of money spent on electricity, as well as reducing their carbon footprint of the consumption. Where a customer engages with the programme, they will have half-hourly visibility of what and when they consume. This is an extremely powerful tool, as once you can measure something, it is only then possible to begin your energy cost reduction journey.
How can Adalta Energy help?
Whilst the MHSS programme is led solely by Suppliers, Adalta Energy are able to provide you with advice, as and when you need it. When the programme goes live, Adalta Energy will be able to ensure you are on the most suitable product, MHHS Agent Agreement and data analysis tools so that you are best placed to take advantage of the changes and reduce your energy costs.
