Today, Ofgem published its decision on the Market-wide Half-Hourly Settlement (MHHS) Change Request CR055 ‘Amendments to M10 and corresponding milestones’ which proposes to extend the timeline to the M10 milestone (‘Central systems ready for migrating Meter Point Administration Numbers’) by 6.5 months to enable the full and robust completion of System Integration Testing (SIT).
Allowing sufficient time for testing
Extending the timeline will ensure that sufficient time is taken to complete robust testing for this significant change in settlement arrangements. This will effectively move the planned date for when Elexon will begin to transition meters to half-hourly settlement, to October 2025.
An essential step towards implementation is to successfully complete the testing of the supporting technology systems. The SIT phase began in October 2023, and the Change Request is a result of progress taking longer than planned.
Milestone 10 for the implementation programme will now be September 2025
Elexon proposed that the M10 milestone in the MHHS Programme plan (the point at which central systems are ready for migrating meters) is moved to September 2025 to allow for further time to complete system testing. There was significant support for this change among energy companies. Suppliers will therefore be able to begin the transition of their meters to the central systems from October 2025 onwards. Other key milestones for the programme will also change, including the cutover to the new settlement timetable (which will now move from December 2026 to July 2027).
Elexon is determined that there will be no further delays in the delivery of the MHHS Programme.
Alongside its decision, Ofgem will be taking forward in early 2025 a package of additional regulatory measures intended to expedite the delivery of MHHS, to support managing the risk of further delay.
Timely migration of meters will bring benefits at the earliest opportunity
Elexon Chief Executive Peter Stanley said: “Half-hourly settlement is one of the most significant reforms to the retail market since competition was introduced. It is essential that we have full confidence in the systems that industry will rely on to ensure that half-hourly settlement will function effectively from day one.
“We are committed to meeting the timescales approved by Ofgem resulting from the change request. With the Clean Power 2030 Plan in place, it is essential that we all work together at pace to deliver on our commitments. We support a timely migration by suppliers of their meters, as that will bring in benefits at the earliest opportunity.”
About half-hourly settlement
Half hourly settlement is a key enabling reform to support Clean Power 2030 and Net Zero. It is an enabler for a wide range of benefits, including development by energy companies of new products and services including a greater range of time of use tariffs, which reward consumers for changing their energy usage patterns. Time of use tariffs give consumers greater incentive to use electricity at other times of the day instead of during peak demand periods, which helps energy companies to manage the system more efficiently.
Half hourly settlement will also benefit electricity companies by reducing the time it takes to complete settlement from 14 months, to just four months. Settlement will also be more accurate as it will be based on actual readings from smart meters and more accurately profiled non-half hourly meters, which will increase efficiency for the industry.