NEWS

Market-wide half-hourly settlement (MHHS) is one of the most important – and most delayed – programmes in the UK energy sector right now. Initially scheduled to go live in early 2018, it has been pushed back multiple times. The current target is December 2026, with a contingency date already set for 2027.

To speed things up, Ofgem has taken complete control of changes to key delivery milestones. Previously, the energy regulator only needed to approve delays of three months or more. From now on, any proposed change to tier 1 or level 1 milestones must go through Ofgem. These levels cover the start of meter migrations, supplier readiness and the completion of the transition. 

In this article, we’ll look in more depth at MHHS. We’ll examine what it is, who it affects and why it matters. 

How MHHS changes the game

Market-wide half-hourly settlement aims to overhaul how electricity is settled in the UK. It relies on real half-hourly usage data from smart meters, replacing the current system of estimates. This shift allows the system to track electricity consumption with more precision.

By basing settlements on accurate, real-world data, energy suppliers can manage demand more effectively and bill their customers more fairly. It creates transparency over how, when and where electricity is used, so all stakeholders can respond and plan better.

Benefits for consumers

The consumer benefits of MHHS could be substantial. Accurate billing will become the norm, reducing disputes with suppliers. Consumers can also take advantage of flexible tariffs, which allow them to save money by shifting their usage to off-peak periods.

Over 25 years, MHHS is expected to deliver savings of between £1.6 billion and £4.5 billion to electricity consumers. As more suppliers introduce time-sensitive tariffs, consumers will gain more control and more choice over how they use energy.

Advantages for suppliers

MHHS makes suppliers financially responsible for electricity usage in every half-hour block. That cost exposure changes how suppliers operate, prompting them to introduce smarter tariffs and services that encourage consumers to avoid peak-time costs. Suppliers could also experiment with other innovations to better manage costs and gain an edge over their competitors.

Smart meters are essential to making MHHS work. They provide the half-hourly data that underpins accurate settlements, flexible tariffs and network-wide transparency. Rather than just being a tool for reporting, smart meters become the gateway for consumers to interact with a smarter, more responsive energy system.

Why Ofgem needed to act

Like the UK smart meter rollout, the MHHS timeline has slipped on multiple occasions. A major delay was approved in June 2023, pushing back a key milestone by more than six months. Each missed deadline creates more uncertainty for suppliers, networks and consumers. 

The latest target to begin MHHS is December 2026. However, the inclusion of a May 2027 contingency date highlights the fragility of the schedule. For a programme of this scale, time is money. The sector needs to see a return on its investment soon.

Ofgem’s decision to oversee all changes to key milestones is a clear move to reduce further delays. The regulator wants better visibility, tighter coordination and faster solutions when problems arise. Some stakeholders argue that Ofgem should only be consulted on delays longer than one month, believing the change would slow things down further. Ofgem rejected this view and incorporated the new approach immediately.

What’s next?

At a recent industry event, energy bosses debated whether MHHS goes far enough. Utilita CEO Bill Bullen argued that the UK should aim for five-minute settlement windows to create sharper pricing signals and more dynamic pricing engagement. On the other hand, Eon CEO Chris Norbury disagreed, urging the industry to focus on delivering half-hourly settlement before introducing new levels of complexity. His view was to complete the job at hand before setting new goals.

While MHHS has taken far longer than expected, we hope that with stronger governance in place, it can finish soon and start delivering benefits across the industry. If delivered well, MHHS will modernise how energy is measured, billed and managed. It could unlock long-term savings and prepare the grid for a more flexible, lower-carbon future. It will be worth the wait.