The MHHS and its impact. How to prepare for the incoming tsunami of energy data.

In a nutshell, the Market Wide Half Hourly Settlement (MHHS) is a significant initiative aimed at facilitating the transition to Net Zero by implementing half-hourly (HH) meter specific settlement across the market. This comprehensive program will play a pivotal role in enabling price-responsive, dynamic, and innovative tariff structures for both Domestic and Small Medium Enterprise (SME) sectors. It will incentivise load shifting for an additional 31 million users, which will lead to an evolution of system requirements. Energy retailers are at the forefront of this transition, with oversight provided by Ofgem (the Office of Gas and Electricity Markets).

The introduction of MHHS will overhaul the way electricity settlement processes work, providing improved calculation and insight in actual energy consumption and generation. This change lays the groundwork for inventive approaches and increased responsiveness from the demand side. More importantly, this settlement will address the current issue with profiling that leads to suppliers balancing to a figure that is not a true reflection of their customers' consumption. For suppliers, this will make it easier to track actual energy usage and develop tariffs that reflect the move towards Net Zero and greener energy sources.

Ofgem and DESNZ (Department for Energy Security and Net Zero) believe that this programme is important not just for the industry, but for consumers as well. Ofgem has estimated that the implementation of the Market Wide Half Hourly Settlement will deliver net benefits to British energy consumers between £1.5bn and £4.5bn by 2045 [1].

Presently, many consumers operate under non-half-hourly (NHH) tariffs, resulting in estimated energy usage rather than precise monitoring. The new settlement approach will usher in a substantial influx of new data, empowering energy retailers to gain a deeper understanding of the actual energy usage by their consumers. This real-time, real-life insight into ongoing energy fluctuations will enable them to handle forecasting with greater accuracy. Consumers will benefit from more innovative tariffs that will incentivise them to take a more proactive approach to their energy usage, empowering them to shift their energy consumption to periods of cheaper energy prices and/or more renewable energy production.

There will be plenty of changes felt across the energy sector for retailers and consumers as we prepare for the rollout of MHHS in 2026. Here are some of the major impacts we see in the years to come, and beyond:

To unlock the huge benefits mentioned above for both energy retailers and consumers, the MHHS programme will support dynamic, reflective, and innovative tariff setting in the Domestic and Small Medium Enterprise (SME) sector. As it stands, the reward for load shifting to meet system requirements is only available to a small minority. This ultimately limits the overall benefit to the system and adversely affects the transition to renewable energy sources as a primary source.

System prices closely correlate with the generation of renewable and green energy. By equipping 31 million users with the ability to decrease demand and shift their energy consumption to periods of lower prices, this initiative not only empowers these users to make greener choices but also enables them to proactively expedite their transition toward Net Zero, contributing to a cleaner future for all. In addition, this shift towards more cost-conscious energy consumption aligns with the prevailing awareness of the "cost-of-living crisis," offering consumers a tangible means to reduce their energy expenses while actively participating in sustainable practices.

The industry has undeniably responded to the challenge in recent years. Despite the recent postponement of the MHHS rollout, which has shifted from its initial 2025 target to a later 2026 timeline, retailers are actively collaborating to bring about this transformation. They have been steadily providing a multitude of workshops and comprehensive documentation, outlining the necessary steps. Simultaneously, they are spearheading the mobilisation of delivery partners in conjunction with leading industry solution architects. This collective effort underscores the industry's commitment to embracing innovation and driving the energy sector toward a more efficient and sustainable future.