Market-Wide Half-Hourly Settlement (MHHS)

Market-Wide Half-Hourly Settlement: A Game Changer for UK Businesses

The UK electricity market is undergoing a significant transformation with the introduction of Market-Wide Half-Hourly Settlement (MHHS). This reform is particularly relevant for businesses, as it enhances the accuracy and efficiency of electricity billing by settling energy usage based on actual half-hourly consumption rather than estimated profiles. Led by Ofgem, the MHHS programme is expected to be fully implemented by October 2025, marking a major shift towards a smarter, more flexible energy system for commercial operations.

Understanding MHHS 

Traditionally, electricity settlement in the UK was based on estimated usage patterns, where businesses and other consumers were assigned to broad consumption profiles rather than having their actual energy use recorded in real-time. The MHHS initiative changes this by leveraging data from smart meters to track and bill electricity usage on a half-hourly basis.

This move is expected to:

• Improve the efficiency of energy settlements for businesses.
• Ensure that companies are charged based on real consumption rather than estimates.
• Reduce reliance on inaccurate forecasting methods.
• Encourage businesses to adopt more flexible energy management strategies.

Benefits of MHHS for Businesses

The transition to MHHS presents several advantages for companies across various industries.

1. More Accurate Billing
   • For businesses, especially those with high energy consumption, half-hourly settlement ensures that electricity bills reflect actual usage rather than estimates. This reduces discrepancies in energy costs and enables better financial planning.
2. Opportunities for Cost Savings
   • By tracking consumption in half-hourly intervals, MHHS incentivises businesses to shift their energy usage to periods of lower demand, which can:
     • Lower operational electricity expenses through time-of-use tariffs.
     • Improve energy efficiency strategies.
     • Support corporate sustainability goals by aligning usage with greener energy periods.
3. Better Energy Procurement and Risk Management
   • For businesses that participate in energy trading or have complex procurement strategies, MHHS provides clearer data on consumption patterns. This allows for more informed purchasing decisions and better risk management in volatile energy markets.
4. Enhanced Grid Stability and Sustainability Goals
   • For large industrial and commercial users, MHHS provides greater visibility into consumption trends, helping businesses align their operations with sustainability initiatives while supporting grid stability.

Challenges and Potential Drawbacks

Despite its benefits, the implementation of MHHS also presents some challenges for businesses.

1. Implementation and Compliance Costs
   • Businesses will need to invest in upgraded systems to process and analyse vast amounts of half-hourly consumption data. Energy-intensive industries may require additional resources to integrate MHHS into their existing operations.
2. Operational Adjustments and Awareness
   • Not all businesses may be fully aware of how MHHS works or how they can benefit from it. Companies will need to adjust their energy strategies, requiring education and potential investment in energy management software.
3. Data Security and Compliance
   • With more granular energy consumption data being collected, businesses must ensure they comply with data protection regulations and implement strong cybersecurity measures to protect sensitive energy usage information.
4. Dependence on Smart Meter Rollout
   • The effectiveness of MHHS depends on the widespread adoption of smart meters. Businesses that have not yet installed smart meters will need to transition to new metering infrastructure to take full advantage of the new settlement system.

The Future of MHHS in the UK Business Sector

The shift to Market-Wide Half-Hourly Settlement represents a major step towards a more transparent, cost-efficient, and data-driven energy system for businesses. While the transition presents challenges, the long-term benefits of cost-reflective pricing, improved demand-side flexibility, and better grid management making it a crucial development for UK businesses seeking to optimise their energy strategies.

As we approach the October 2025 deadline, continued collaboration between Ofgem, business energy consumers, suppliers, and regulators will be key to ensuring a smooth transition. Ultimately, MHHS has the potential to help businesses gain better control over their energy costs, improve sustainability efforts, and navigate a rapidly evolving energy market.

How prepared is your business for MHHS? Have you considered how half-hourly settlement might impact your energy strategy?

How E&G Compare Can Help

Navigating the complexities of MHHS can be challenging, but E&G Compare is here to help. We specialise in providing businesses with tailored energy solutions, helping you understand the impact of half-hourly settlement and find the best energy deals. Our expert advisors can guide you through the transition, ensuring that your business maximises cost savings and efficiency.

Get in touch with E&G Compare today to explore how we can support your business in adapting to MHHS and securing the most competitive energy rates.

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