How the UK's MHHS will put the power back in the hands of customers

David Sheldrake, global SVP of Sales360 for POWWR, writes on the UK’s Market-wide Half Hourly Settlement (MHHS), a migration that should be seen as more than just an upgrade.

The need for meters to adhere to the MHHS rules set out by Ofgem is inching ever closer. The migration is more than simply a technology upgrade. It signifies a move towards a more adaptable, responsive, and sustainable energy framework.

By giving customers more control, promoting innovation, and encouraging collaboration, MHHS sets the stage for a future where achieving net zero is not just a goal, but a tangible reality.

Greater awareness

In many ways, the move towards MHHS puts the power back in the hands of consumers. After all, it provides them with greater awareness over their energy consumption than ever before. Through the new breed of associated smart meters and the innovative time-of-use tariffs that will surely become available, consumers will be able to make more informed decisions about when and how they use energy. This will not only help lower energy bills but lead to greater grid stability.

However, it will not be easy. Around 30 million meters will need to move over to the new MHHS Target Operating model, with 2.6 million of those being within businesses.

What is MHHS?

The MHHS is the new electricity market arrangements that will enable the flexibility to support transition to Net Zero. A shorter and more accurate Settlement timetable using Half Hourly meter readings for settled energy will support a cost-effective electricity system, encourage flexible use of energy and help lower bills.

The MHHS Programme is an industry-led programme established to deliver the Target Operating Model and aims of the Electricity Settlement Reform Significant Code Review (SCR). This will see meters migrate to a new topline to comply with the changes. MPANs will migrate in phases by supplier. The suppliers are going through a qualification process, and this will determine when the MPAN is migrated.

Have you read:
Market-wide half-hourly settlement – the data revolution unlocking net zero in UK
Half hourly settlement: What can gas learn from the electricity sector?

Smarter energy pricing

Smart meters have been replacing traditional gas and electricity meters across the UK for almost a decade and a half. They make the energy system more flexible, boost efficiency, help in the move towards more renewable energy sources, and reduce energy consumption by 3.4% for electricity and 3.0% for gas on average.

Despite these proven advantages though, moving customers to them has been tricky.
According to the most recent data there are around 32.4 million smart and advanced meters in the UK, representing just 57% of all meters. Because of this, the industry most now work doubly hard to convince the remaining 43% to rip and replace any meters that are not MHHS compatible.

Greater accuracy and stability

The benefits of MHHS are numerous. However, more than anything it will boost accuracy and stability. Consumers and TPIs alike will have access to more granular data. This will lead to consumers being priced with enhanced accuracy based upon true market conditions. AI driven pricing based upon better data will also likely lead to innovation in product offerings.

This accuracy will lead to a more stable grid. Plus, it will protect suppliers in terms of energy purchased and help minimise margin losses on contracts where inflated usages may have previously occurred.

Milestones for success

There have been several significant milestones set out by Ofgem. These include:

• October 2024 – Suppliers must have a solution available to consumers and third-party intermediaries (TPIs) that provides them with access to Electricity Half Hourly data and Gas Hourly data for all customers on a Profile Class 1-4 or Gas using less then 732MwH per annum.
• February 2025 – For Non-Half Hour (NHH) meters, the industry tool should be implemented to provide automation to change measurements classes associated to each meter to ensure they are Half Hour (HH) ready.
• March 2025 – Changes to the top line data of all NHH meters will be made. Meter Time Switch Code (MTC) will be removed and replaced with a Settlement Configuration (SSC) Id, and Current Line Loss Factor (LLF) will be split into a DUoS Tariff Id and a new LLF. This will impact every system, process or document which holds these numbers from customer bills to internal databases.
• September 2025 – The industry needs to be ready to change the Top Line Supply Numbers and migrate meters to be HH. No physical meter changes are expected at this point, however terminology on bills will change. The migration of meters to HH will be phased in two waves.
• March 2026 – For the meters that are unable to be switched to HH, suppliers will have to engage with consumers to make physical changes or replace meters to align to MHHS.
• May 2027 – The date by which all eligible meters need to be switched.
• July 2027 – Timeline complete and all meters can be HH settled. All other electricity profile class (01-04) will no longer exist.

A dynamic ecosystem for the future

Let’s hope we can stay on track and that 2025 will be see a ramp up in efforts to ensure both pricing and settlements become better aligned in the future. However, the overall roll-out will likely take another couple of years. During this time, there will be a teething period where consumers and the industry alike need to become familiar with the required top line changes to the meters and what the new associated terminologies mean.

However, it is surely a price worth paying. The move to MHHS will ensure that consumers are no longer passive recipients of energy but become active contributors in a dynamic ecosystem. Becoming empowered to shape their own energy futures through participating in more dynamic pricing schemes and time-of-use tariffs.