Industry leaders label MHHS as ‘lifeblood’ of energy transition

Senior leaders from across the energy sector have told Utility Week they see the introduction of market-wide half-hourly settlement as a critical step in the transition to a net zero system and a moment of significant commercial opportunity.

Giving input to Utility Week’s recently published report Market-wide settlement reform: a moment of opportunity, leaders described the change as a “gamechanger” and “the lifeblood of the energy transition”.

One senior figure at a major energy retailer, holding responsibility for market transformation activities, labelled the introduction of market-wide half hourly settlement as “one of the most significant changes to the system since privatisation.”

They added that MHHS will deliver a much needed “modernisation of the dinosaur that is today’s energy system. It will lead to a fundamental change to the way we do energy”.

These sentiments come just after the announcement of delays to the implementation programme for MHHS in which Ofgem cited widespread industry discontent with the previously targeted timescales.

In a report justifying the push back, Ofgem said feedback from industry was that the initial intention to go live with MHHS in Autumn 2025 was “unrealistic and unachievable” especially in “challenging market conditions”. The regulator added that the timeline “lacked buy-in”.

The views shared in Utility Week’s report however, suggest that this negativity does not extend to the end goal of the programme which is commonly expected to unlock significant value for the energy system, consumers and commercial entities via stimulation of demand-side energy flexibility markets.

To access these opportunities however, several commentators told Utility Week that new partnership models will need to be forged between suppliers and a “new market layer” of data service providers who can assist in the manipulation and presentation of data.

Acknowledging that capability and cost constraints mean most suppliers are unlikely to be able to read the value from increased volumes of settlement data alone, a senior energy retail representative said: “It’s going to boil down to what is more efficient. If there’s a provider that can do that manipulation of data and show us a way to create new value from it in a really efficient way, we’d be crazy not to take that on.”

Utility Week’s report, created in association with technology and engineering consultancy Expleo, is based on a series of in-depth anonymised interviews with senior figures from across the energy industry, including energy suppliers and power networks as well as others.

In these interviews leaders shared their feelings about the extent to which the arrival of MHHS is seen as a moment of opportunity, how heavily any benefits depend on key factors being in place at go-live and any risks that they see associated with the introduction of MHHS.

While the vast majority were extremely positive about the potential value MHHS should unlock, the interviews also raised some common concerns. For example, the ability of suppliers to achieve widespread smart meter deployment by the end of 2025 was identified as a key dependency for value and there was low confidence in this becoming a reality.

Furthermore, there was universal concern that MHHS could trigger exaggerated consumer detriment challenges through inequality of access to new tariffs, without careful modernisation of consumer protection regimes and other measures to educate and support consumers.

Another area of concern, especially for network leaders, was the propensity for MHHS to drive unintended consequences for the power grid through uncontrolled growth demand-side flexibility engagement and the flattening of diversity in demand patterns.

For more information, download the full report here.