Market-wide Half Hourly Settlement (MHHS) Working Groups
Latest news: We have adjusted our plans for this work due to COVID-19. More information below.
In July 2017, Ofgem launched its Significant Code Review (SCR) on Electricity Settlement Reform.
Here you can find the outputs of three industry working groups which ELEXON is chairing and providing with technical leadership to support Ofgem’s SCR. All three groups report to Ofgem and Ofgem sets their membership and Terms of Reference.
- Design Working Group (DWG): The DWG ran from 2017 to 2019 and is now stood down. It designed the Target Operating Model (TOM) for MHHS, as well as the approach for transitioning from the current Settlement arrangements to the TOM. We submitted the DWG’s final report to Ofgem in August 2019. Ofgem gave its preliminary approval to the DWG’s TOM and transition approach in October 2019.
- Code Change and Development Group (CCDG): The CCDG has been meeting since December 2019. It is developing further the outstanding detailed areas of the DWG’s TOM design. It will also identify, and oversee drafting of, the changes needed to Industry Codes and subsidiary documents to enable the TOM.
- Architecture Working Group (AWG): The AWG has also been meeting since December 2019. It is developing the solution architecture required to enable the DWG’s TOM.
How are we addressing the impact of COVID-19 on this work?
We recognise that the Coronavirus (COVID-19) situation is resulting in significant operational challenges for our stakeholders, reducing their capacity to engage with non-time-critical industry work. With the agreement of Ofgem and our working group members, we have therefore adjusted the CCDG and AWG work plans.
We are continuing work with the CCDG and AWG on their pre-consultation activities but will not issue any formal industry consultations at this time. We will only continue work to the extent that members’ resourcing capacity allows and providing we can retain a sufficient cross-section of representation. We will continually review and (if needed) adjust activities with the groups, to ensure that they remain achievable.
ELEXON and Ofgem will consider the impact on the overall CCDG and AWG delivery timescales once Ofgem agrees that we can resume the groups’ consultation activities.Read Ofgem's full letter to ELEXON confirming this approach.
How do these groups fit into Ofgem’s SCR process?
Development of the TOM forms one of several work streams in Ofgem’s wider SCR. Ofgem’s other parallel SCR work streams include:
- Related policy decisions (on access to Half Hourly data for Settlement purposes and on Supplier Agent functions)
- Consideration of consumer impacts
- Development of the business case for MHHS (including Ofgem’s draft Impact Assessment consultation, on which Ofgem seeks responses by 14 September 2020)
Ofgem will bring the outputs of all the SCR work streams together in its Full Business Case decision on how and when to proceed with MHHS. Ofgem will make the final decision on the TOM and transition approach. The CCDG and AWG can only make recommendations to Ofgem.
Following the CCDG’s final report, Ofgem will also make the necessary changes to licences and Industry Codes, which will not follow the normal Code change processes.
What are the potential benefits of MHHS?
Smart Meters can record the amount of energy consumed or exported within every half hour of the day.
Through MHHS, this data provides an opportunity to make the BSC Settlement process more accurate and timely. It also helps facilitate a smarter energy system by encouraging more dynamic and flexible ‘time of use’ energy deals, where consumers save money if they shift their energy usage away from times of peak demand. Ofgem’s draft IA identifies total net benefits of MHHS for GB consumers of £1.607bn to £4.557bn.
You can find more information on Ofgem’s view of the potential benefits in its business case publications.