UK energy regulator Ofgem has given the green light to roll out market-wide half-hourly settlement (MHHS) across the electricity retail market.
The need for the new programme arose because most domestic and small non-domestic
electricity customers have not had meters that can record half-hourly consumption, so their consumption has been estimated for each half-hour.
The new system, which will use data collected from consumers’ smart meters, is planned to be implemented in the next four and a half years and be complete by October 2025.
The MHHS is expected to support grid flexibility and help suppliers offer more flexible products designed for savings on energy bills.
The settlement is believed to incentivise suppliers and other retailers to offer smart tariffs and other products that help customers to shift consumption from peak periods.
Ofgem estimates half-hourly settlement would save consumers between £1.6 billion to £4.5 billion by 2045.
Anna Rossington, Interim Director, Retail, said: “This decision marks a major milestone in the transition to the smart, flexible energy system essential to Britain achieving its net zero climate goals at the lowest cost to consumers.”
Responding to the announcement, Solar Energy UK Chief Executive Chris Hewett said: “One might question the overly cautious length of time set aside for testing in the midst of a climate emergency, but otherwise it is fantastic to see Ofgem is moving the dial on the matter of half-hourly settlement.
“The decision will undoubtedly enhance innovation in the market and the role of solar and battery storage in supporting the grid.”