UK's Market-Wide Half-Hourly Settlement (MHHS) Reform: What It Means

Consequently, this shift enables a more accurate and timely reflection of energy consumption, paving the way for innovative services like time-of-use tariffs and demand-side response. By 2026, MHHS is expected to be fully operational, delivering benefits such as reduced energy costs, enhanced grid reliability, and a crucial role in supporting the UK’s net-zero goals.

In addition, the reform is expected to generate net benefits of £1.6 billion to £4.5 billion by 2045, benefiting both consumers and the broader energy market. As the industry transitions to MHHS, suppliers must adapt to new operational models, which will include integrating advanced technologies and rethinking consumer engagement strategies. Ultimately, this evolution aligns with the UK’s broader decarbonization efforts and ensures that the energy system remains resilient and future-ready.

Source: MHHS

Firstly, MHHS directly impacts energy costs. With half-hourly settlements, your bills will reflect actual energy use rather than estimates. Consequently, businesses that shift energy use to off-peak times can save on costs. Conversely, those operating during peak periods might see higher charges. The accuracy of half-hourly settlements presents both opportunities and challenges:

• Potential Savings: If your business can shift its energy usage to off-peak times, you might see reduced energy costs. Time-of-use tariffs will reward businesses that can be flexible with their consumption patterns.
• Increased Costs: On the other hand, if your business operates primarily during peak demand times, your energy costs may increase due to the higher charges associated with those periods.

You can read more on how your business can benefit from optimising its energy usage with our energy management solutions.

Secondly, every business must upgrade to smart meters under the MHHS reform. If you use a non-half-hourly meter, the upgrade is non-negotiable. Therefore, energy suppliers will manage this process, contacting you to schedule installation. Moreover, downgrading to traditional meters isn’t allowed, as the new system relies on smart technology for efficiency.

The MHHS reform unfolds in stages, with full implementation set for October 2025. Here’s a timeline:

• 2023-2024: Businesses prepare and adopt the system early.
• April 2025: Mandatory migration for energy suppliers begins.
• October 2025: Half-hourly settlements become compulsory.

Therefore, businesses should prepare early to ensure compliance and optimise potential benefits.

Additionally, the reform also affects households. Homes with smart meters will shift to half-hourly settlements, leading to more accurate bills and innovative tariff options that could reduce costs and support technologies like Solar PV and Battery Storage systems.

Finally, if you decline a smart meter, you’ll eventually need to comply. As a result, energy suppliers will arrange the installation, and refusal might result in less favourable standard tariffs. Therefore, the transition is necessary to access the benefits of the new billing systems.

The Market-Wide Half-Hourly Settlement reform represents a significant shift in the UK’s energy market, with the potential to benefit both businesses and consumers through more accurate billing and the promotion of energy efficiency. Businesses should start preparing now to take full advantage of the opportunities this reform presents.

If you or your business have any questions, please feel free to get in touch with one of our energy experts to discuss how this may impact you.