Energy regulator Ofgem has finally given the go-ahead for the rollout of market-wide half-hourly settlement (MHHS) across the electricity retail market.
A decision on the plans for the implementation of MHHS has been delayed three times previously including from the first half of 2018, the second half of 2019 and the third quarter of 2020.
In an announcement today (20 April) Ofgem revealed that the implementation of the new system is expected to take place over a period of four and a half years and is to be completed by October 2025. The transition period will allow extensive testing to take place in order to iron out any issues before going live.
The new system builds on changes already made which require half-hourly settlement for medium to large non-domestic customers, and elective half-hourly settlement for domestic and smaller non-domestic consumers.
Ofgem has previously estimated that it will benefit electricity consumers by between £1.61 billion to £4.56 billion over the next 25 years.
Anna Rossington, interim director of retail at Ofgem, 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.”
“These reforms are complex, but we know there’s a huge appetite across the sector to make these vital changes a success,” she added.
Today’s decision also confirmed that Balancing and Settlement Code manager Elexon would be the senior responsible owner for the programme, as suggested in January.
An Elexon spokesperson said: “MHHS is one of the biggest changes to the electricity market since competition was introduced in 1998. It is also part of the critical path to net zero and a smarter energy system, built on the rollout of smart meters.
“We will now start to mobilise the programme and we will be seeking input from industry on programme set up, industry engagement and resultant budget. We want to ensure that we are set up to deliver MHHS successfully for all programme parties and their customers.”