Overview of the Market-wide Half Hourly Settlement programme
In 2017, energy regulator Ofgem announced a review on whether the whole electricity market (commercial as well as residential properties) should move to half-hourly Settlement. Ofgem’s consultation on its draft Impact Assessment identifies the need for a delivery Market-wide Half Hourly Settlement Programme Manager, accountable to Ofgem for ensuring the successful implementation of MHHS.
On this page
Ofgem confirms Elexon will operate key IT data platform to support MHHS22 April 2022
Ofgem approve Elexon’s Business Separation Plan for Market-wide Half Hourly Settlement25 November 2021
Review of the MHHS 2021/22 costs – £4m to be returned to Suppliers in December16 November 2021
CCDG recommendations following MHHS transition consultation30 September 2021
Nominations needed for members of MHHS Programme decision groupsSource: MHHS programme 7 September 2021
MHHS Programme Governance Framework issued 30 July 202130 July 2021
How it relates to you
MHHS will be one of the biggest overhauls of electricity systems and processes since privatisation and the introduction of the competitive market in 1998.
Moving to MHHS will:
- make the Settlement process more accurate and quicker reducing current timescales to around 4 months
- act as an enabler for new products and services, for example supporting use of electric vehicles or making use of smart appliances through ‘time of use’ tariffs (where consumers save money if they shift their energy usage away from times of peak demand)
- help to encourage innovation to support a smarter and more flexible electricity system
- Ofgem’s draft MHHS Impact Assessment identifies total net benefits of MHHS for GB consumers of £1.6bn to £4.6bn
Industry guidance from MHHS programme
The MHHS programme has a dedicated website to support the industry-led MHHS Programme. The MHHS Programme website will provide key information for participants and enable collaboration for Working Groups as well as details on events and Programme assessments.
Understanding the impact on the BSC
The BSC website has a dedicated web page that gives further information on how the MHHS programme will impact the BSC processes and obligations. On this page you can find out about what Elexon is doing to ensure that Market-wide Half Hourly Settlement (MHHS) is implemented smoothly across the Balancing and Settlement Code Central Systems
Programme manager role
In our consultation response, we have said that Elexon would undertake this role if Ofgem and the industry wish us to do so.
MHHS programme implementation activities will be separated from Elexon’s other BSC activities. This ensures that the programme is independent of Elexon, including for decision-making, resourcing, budgeting and reporting. There will be a dedicated website for the programme as well as separate e-mail addresses and dedicated workspace for programme team members.
We have published a pamphlet on how we would leverage Elexon’s capabilities to perform the role of Programme Manager.
The key CCDG and AWG milestone are:
- CCDG consultation on detailed areas of TOM design (Q4 2020)
- AWG consultation on reference architecture (Q2 2021)
- CCDG consultation on detailed transition approach (Q2 2021)
- AWG final report to Ofgem for approval (Q2 2021)
- CCDG consultation on Industry Codes legal drafting (Q1 2022)
- CCDG final report to Ofgem for approval (Q2 2022)
We are currently reviewing the timing of the CCDG’s milestones alongside Ofgem’s wider MHHS Programme planning.
Kevin Spencer, Market Architect at Elexon, produced a the video in September 2020 that covers the settlement timetable and explains the new Target Operating Model.
In 2017, energy regulator Ofgem announced a review on whether the whole electricity market (commercial as well as residential properties) should move to half-hourly Settlement.
Electricity used by the largest consumers (typically industrial companies) has been measured in half-hour periods for many years. This is because meters installed at these premises record consumption every 30 minutes and send that information to Suppliers. The amount of electricity they are consuming compared with how much is being generated can then be settled every half hour.
Traditionally, electricity used by smaller businesses and households every half hour has been estimated (In the past it was too expensive to install meters to provide half hourly readings). Estimates of their usage are updated as meters are read, meaning that the current Settlement process takes over a year to complete.
However, now that smart meters are being fitted in homes and smaller businesses they will record actual consumption every half hour. This means the whole electricity market could be settled every half hour.
Since 2017, Elexon has been leading industry work to deliver the MHHS Target Operating Model (TOM) to Ofgem. We’re supporting Ofgem’s review by:
- developing the overall TOM design, Settlement timetable and transition approach (with the Design Working Group), which we delivered in August 2019 and received preliminary approval from Ofgem in October 2019.
- developing further detail on the TOM design and transition approach, and overseeing the identification/ drafting of the necessary Industry Code changes (with the Code Change and Development Group and other code bodies).
- developing the reference architecture to support the TOM (with the Architecture Working Group), which will set the framework for subsequent IT system design.
- carrying out the planning of a post-AWG architectural design phase.
Development of the TOM forms only one part of Ofgem’s wider review. The DWG, CCDG and AWG make recommendations to Ofgem, which will make the final decision on how and when to proceed with MHHS. You can see further detail and reports by the DWG, including the DWG’s report on the preferred TOM and the final report on the TOM and transition approach to it, by visiting the specific group’s web pages.
CCDG consultation on MHHS
The consultation has now closed. However, you can find out more about the aims and goals of the consultation by visiting the CCDG consultation on MHHS page.
You can also watch a webinar about the consultation:
Length: 68 min, 2 sec
View the slides that were presented at the consultation.
Ofgem’s draft Impact assessment consultation
In April 2020, Ofgem published its Draft Impact Assessment Consultation on introducing MHHS.
This consultation closed on 14 September 2020 and included the following:
- Target Operating Model and data aggregation arrangement
- Settlement timetable
- Export-related meter points
- Transition period
- Programme management
Our response to the consultation
We have published our response to Ofgem’s Draft Impact Assessment Consultation.
The response includes:
- our agreement with Ofgem’s proposals to implement MHHS for both import and export at the same time
- our agreement with Ofgem’s proposal to require daily granularity of data for smart meter customers who opt out of sharing their half-hourly data for Settlement purposes
- explaining our belief that Elexon is best placed to take on the Programme Manager role for the implementation of MHHS (find out more about this in ‘Implementing MHHS’ below)