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An Introduction: Market-wide Half Hourly Settlement (MHHS)

An Introduction: Market-wide Half Hourly Settlement (MHHS)

The way in which your electricity consumption is measured is changing.  

Elexon is responsible for overseeing the industry-led transition, working with electricity suppliers, generators, traders and buyers to establish the new rules. 

The adjustments will be completed by October 2026 and the new Market-wide Half Hourly Settlement (MHHS) system will aim to drive improvement in billing accuracy, account settling, carbon emission reduction and increase opportunities to save on energy costs. 

In essence, Market-wide Half Hourly Settlement (MHHS) provides electricity users with real-time data in 30-minute intervals. 

Here's an explanation of what MHHS is and what the changes actually mean.

What is MHHS?

A government mandate that requires all energy suppliers across the UK to settle energy trades and payments based on a half-hourly basis for all consumers by end of 2026.

As a consequence, each energy supplier will be obliged to install smart meters rather than the traditional HH or NHH meters.

The change is industry-led but is overseen by Elexon, the UK agency managing all settlement processes in the UK as programme coordinator. The change is also sponsored financially by Ofgem.

Why is it required?

Energy suppliers are already obliged to procure electricity from the wholesale market at 30-minute intervals. Most UK consumers, however, are still settled on a non-half-hourly basis. As a result, an imbalance appears between supply and demand.

In today’s volatile energy markets, this heavily affects the bottom line of businesses.

How does MHHS work?

By tracking and settling energy consumption and production in 30-minute intervals, it will erase the currently existing HH and NHH categories and will establish three new meter categories:

  • Smart metering
  • Advanced metering
  • Unmetered supplies

What does this mean for market participants?

Electricity companies will need to improve settlement processes and offer innovative tariffs and services.

There can be several benefits of MHHS from enhanced accuracy in billing, real-time tracking of supply and demand, and significant cost savings for energy suppliers. However, the bottom line is that each market participant will need to embrace energy flexibility

How does MHHS impact the consumer?

MHHS enables more precise billing by monitoring real-time supply and demand data. This accuracy benefits consumers by promoting transparent and dynamic pricing, ensuring they are billed more accurately, and potentially offering cost-saving incentives for off-peak usage.

How MHHS is linked to Net Zero

MHHS plays an important role in achieving the UK’s Net Zero goal by facilitating the integration of renewable energy sources to create smart, flexible local energy systems.

Half-hourly demand data enables grid operators to better predict and manage energy demand – this is cardinal for accommodating the intermittent nature of all renewable sources.

MHHS also encourages demand response, empowering consumers to adjust usage patterns during peak demand periods and align them with renewable energy availability.

The long-term incentive is to promote a cultural change in energy usage to maximise our use of renewables and optimise network capacity while empowering consumers to benefit from the behavioural changes needed to meet the ambitious Net Zero targets.