The MHHS and its impact. How to prepare for the incoming tsunami of energy data.

Huw Davies
September 19, 2023
6 min

The MHHS and its impact. How to prepare for the incoming tsunami of energy data.

The roll-out of MHHS will cause a data tsunami, impacting retailers and consumers. Discover how you should respond to these incoming changes.
Huw Davies
September 19, 2023
6 min

The MHHS and its impact. How to prepare for the incoming tsunami of energy data.

Huw Davies
September 19, 2023
6 min

A data tsunami is coming. The rollout of the Market Wide Half Hourly Settlement (MHHS) is rapidly approaching and the impact will be huge. It will serve as one of the most significant changes to the energy market since the introduction of competition back in the 1990s.

With a planned introduction in 2026, MHHS has rightly become a hot topic for the energy industry. But what is this new initiative, how will it impact both the energy retailer and the consumer and how should we respond to these incoming changes? These are just some of the questions we’ll be covering here.

What is MHHS and why has it been initiated?

In a nutshell, the Market Wide Half Hourly Settlement (MHHS) is a significant initiative aimed at facilitating the transition to Net Zero by implementing half-hourly (HH) meter specific settlement across the market. This comprehensive program will play a pivotal role in enabling price-responsive, dynamic, and innovative tariff structures for both Domestic and Small Medium Enterprise (SME) sectors. It will incentivise load shifting for an additional 31 million users, which will lead to an evolution of system requirements. Energy retailers are at the forefront of this transition, with oversight provided by Ofgem (the Office of Gas and Electricity Markets).

The introduction of MHHS will overhaul the way electricity settlement processes work, providing improved calculation and insight in actual energy consumption and generation. This change lays the groundwork for inventive approaches and increased responsiveness from the demand side. More importantly, this settlement will address the current issue with profiling that leads to suppliers balancing to a figure that is not a true reflection of their customers' consumption. For suppliers, this will make it easier to track actual energy usage and develop tariffs that reflect the move towards Net Zero and greener energy sources.

How will MHHS impact the consumer and the energy retailer?

Ofgem and DESNZ (Department for Energy Security and Net Zero) believe that this programme is important not just for the industry, but for consumers as well. Ofgem has estimated that the implementation of the Market Wide Half Hourly Settlement will deliver net benefits to British energy consumers between £1.5bn and £4.5bn by 2045 [1].

Presently, many consumers operate under non-half-hourly (NHH) tariffs, resulting in estimated energy usage rather than precise monitoring. The new settlement approach will usher in a substantial influx of new data, empowering energy retailers to gain a deeper understanding of the actual energy usage by their consumers. This real-time, real-life insight into ongoing energy fluctuations will enable them to handle forecasting with greater accuracy. Consumers will benefit from more innovative tariffs that will incentivise them to take a more proactive approach to their energy usage, empowering them to shift their energy consumption to periods of cheaper energy prices and/or more renewable energy production.

So, what changes can energy retailers and consumers expect to see in the run-up to 2026 and in the years that follow its initiation?

There will be plenty of changes felt across the energy sector for retailers and consumers as we prepare for the rollout of MHHS in 2026. Here are some of the major impacts we see in the years to come, and beyond:

Area of changeOverall Impact31 million meters to be settled on HH instead of NHH31 million meters multiplied by 48 half-hour periods per day, and then multiplied by 365 days results in a significant amount of quantifiable data. That’s 565,750,000,000 additional meter reads per year, amounting to 4.2TB compressed measurement data per year. New meter attributesChanges will be required for the attributes used for pricing. Traditional systems such as the Standard Settlement Classification (SCC) and the Measurement Class will be replaced to create a new market segment: Smart, Advanced, and Unmetered.New data flowsFor the consumption of energy on a half-hourly basis, the existing Data Transfer Network (DTN) D0036 and D0275 will be replaced with the new IF0021 as part of the Data Integration Platform (DIP).Agent changesThe role of Data Collectors and Data Aggregators will be replaced with the new Smart Data Service Providers.NHH load profile replacementLoad profiles will ultimately be replaced with actual data from meters. Where this is not possible, usage will be calculated using a new Load Shaping Service.

It is clear the energy market is undergoing a transformative shift towards a net-zero future. The distinction between half-hourly and non-half-hourly classifications will dissolve, leaving meters as the sole and key means of gathering energy data. As a result, consumers will enjoy a level playing field where energy suppliers can offer tailored products based on the factual information derived from their meter readings while maintaining their own profitability through better forecasting tactics. This advancement paves the way for a more sustainable and consumer-centric energy landscape, as intricate time-of-use tariffs harmonise with consumers' actual energy usage.

What could be the outflux for energy retailers if they handle the data influx properly?

While the potential benefits of handling this data influx are evident, it's clear that the market may require some time to fully adapt to its implications:

  • The current framework of the electricity market operates on outdated estimates rather than actual consumption figures, with up to 97% of electricity meters being billed based on estimates.
  • Domestic customers can still be profiled based on their Economy 7 meter types from 1978, even as their electricity usage becomes increasingly diverse due to evolving energy devices (such as EV charging and solar panels) and shifting social dynamics, such as work-from-home arrangements and heightened cost-of-living awareness. This makes correct customer classification very hard.
  • Overall, the energy software and product innovation process is hindered by its sluggish and complex nature.

When confronted with the prospect of integrating 4.2TB of energy data into the existing systems, a crucial question emerges: can the existing infrastructure effectively manage this surge of information and translate it into an outflux that bolsters the energy retailer’s viability?
If yes, this outflux could manifest in several ways:

  • Delivering true cost-reflective pricing, backed by verifiable data, challenging the notion of settling for estimations.
  • Securing predictive analysis to identify anomalies and patterns, thereby enhancing forecasting and decision-making.
  • Generating distinct propositions that resonate with customers, offering accuracy, verification, and personalisation, and, ultimately, delighting said customers.

When dealt with correctly, this tsunami of data could realise a self-sustainable balance between share of wallet, dependable service delivery, and the pursuit of net-zero targets.

What does the MHHS roadmap look like for the (UK) energy market?

To unlock the huge benefits mentioned above for both energy retailers and consumers, the MHHS programme will support dynamic, reflective, and innovative tariff setting in the Domestic and Small Medium Enterprise (SME) sector. As it stands, the reward for load shifting to meet system requirements is only available to a small minority. This ultimately limits the overall benefit to the system and adversely affects the transition to renewable energy sources as a primary source.

System prices closely correlate with the generation of renewable and green energy. By equipping 31 million users with the ability to decrease demand and shift their energy consumption to periods of lower prices, this initiative not only empowers these users to make greener choices but also enables them to proactively expedite their transition toward Net Zero, contributing to a cleaner future for all. In addition, this shift towards more cost-conscious energy consumption aligns with the prevailing awareness of the "cost-of-living crisis," offering consumers a tangible means to reduce their energy expenses while actively participating in sustainable practices.

The industry has undeniably responded to the challenge in recent years. Despite the recent postponement of the MHHS rollout, which has shifted from its initial 2025 target to a later 2026 timeline, retailers are actively collaborating to bring about this transformation. They have been steadily providing a multitude of workshops and comprehensive documentation, outlining the necessary steps. Simultaneously, they are spearheading the mobilisation of delivery partners in conjunction with leading industry solution architects. This collective effort underscores the industry's commitment to embracing innovation and driving the energy sector toward a more efficient and sustainable future.

Important milestones on the MHHS Roadmap [2]

  • 2023 - 2025: System Integration Testing (SIT)
  • 2025 - 2026: 18-month migration for UMS / Advanced
  • March 16 2026: All suppliers must be able to access the MPANs under the new TOM
  • October 5 2026: Full transition complete

Here at Gorilla, our mission is to accelerate the transformation of the energy and utility industry worldwide with energy data applications. We’ve aggregated all the MHHS knowledge in our Universal Energy Suite, so we can be the data specialist you need to help you face and master the upcoming data tsunami. Engage with one of our Gorilla Data Rangers today and let’s have an open and candid conversation in more detail.

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