Friday, April 12, 2024

MHHS: Timing is everything, and the clock is ticking

Justin Vroone, Chief Commercial Officer, IMServ

Market-wide half hourly settlement – like it or loathe it, the one thing you can’t do is ignore it. A final implementation date in 2026 may give the impression this can be deposited in the do later pile, but in fact now is precisely the time for utilities to start planning in earnest if they don’t want to be caught out. The programme 

may have been pushed once, but it’s unlikely to shift again. In fact, by working backwards from the revised final migration and transition dates, it becomes apparent that time is in fact a little tight, and 2024 is the critical year.

The first movers have moved

Let’s be clear: the first movers on MHHS have already made their moves. Early-engagers will soon enter the SIT (system integration testing) stage, which commences in November this year. Suppliers and Service Providers alike have put their hands up to go first and will benefit from an earlier, closer look at the precise machinations of the new regulation, and will be primed and ready ahead of their competitors when mandatory implementation comes. Crucially, they will have a longer window to carry out migration and address any teething problems that may arise.

SIT entry is now closed, so these first mover advantages are now off the table. For the rest of the market that raises the questions of when they can and when they should follow with their own MHHS implementation programme.

Second vs last mover advantage

The next window for entry into the MHHS programme proper will be when Qualification begins at the beginning of 2025. There will be several intakes, or tranches, and the decision for utilities will be whether to aim for an earlier or later tranche.

One school of thought will be to leave it late in the hope of reaping some last mover advantages. For example, the later entrants will benefit from seeing any unexpected challenges arise for their more proactive peers, and may themselves have fewer surprises in store. They may also reason that this will give more time for service providers to fully work through their MHHS offering, though I would argue that any provider serious about operating in the UK market will be jumping straight into tranche one, if not already part of the SIT cohort.

Late entry is likely to be most attractive to smaller suppliers, with meter points measured in the hundreds-of-thousands rather than the millions. They may reason they have less to migrate and therefore require less of a window versus bigger peers, plus suppliers may have been around the block a few times already by this point and be in a position to handhold nicely.

However, there are real risks of leaving it late. I agree that larger suppliers will likely want to move earlier in order to maximise the window available to them to make the migration. However, there is no guarantee that all of these suppliers will complete their migration smoothly and in a timely manner. The MHHS programme as a whole only has capacity to migrate a finite amount of data per month, and late-waiters may find that capacity is tied-up by those ahead of them in the queue who are overrunning. Similarly, if relying on service providers to help manage the migration, late entrants may find their partners of choice fully booked.

Positioning for entry into an early tranche still provides some of those late-mover advantages, as those involved in the SIT phase will have hammered out some of the kinks already. However, it also provides maximum contingency and minimises risk.

And of course – and this may be something that excites the boardroom more than the operations folk tasked with implementing MHHS – part of the case for change is that MHHS enables innovative new energy services and tariffs. Therefore, earlier adoption means earlier opportunity for commercial innovation too.

Implementation implications: questions to ask

Assuming you are convinced that an early tranche is the way to go, what does that mean? 2025 qualification testing still seems a long way away, right? Not necessarily. Ask yourself these questions:

  • Am I ready for MHHS?
  • Are my systems ready?
  • Have I selected systems providers for the post MHHS world? Are they the same as today? Should I consolidate them?
  • Is my system design agreed?
  • Are my service partners agreed for qualification testing?
  • Is my portfolio ready for the migration once we have completed qualification and secured PAB approval to proceed 

Bear in mind that IT systems will be placed under much greater load than before. For each meter, suppliers will be going from one meter read per day or even per quarter, to 48 every day – that’s 4,320 per quarter. There is no need to panic – these are perfectly handleable data volumes – but it does underline the need to check that systems are up to scratch.

Now, think about the length of time it might take to do the following: assess current software and service providers and IT systems; make a recommendation for change to the board; compile the business case; negotiate terms and sign contracts; offboard old and onboard new suppliers; implement IT system changes; quality and assurance testing for any changes. Think of how many stakeholders may be involved in each of these, and how many weeks or months each might take. Factor in human considerations such as holidays, Christmas etc.

Remember that changes to systems require time for users to rebuild familiarity, and that while the bulk of the changes may be seamless, time is often eaten up by the exceptions.

Consider again: does early 2025 still seem far away?

2024: get your MHHS house in order

There is a compelling case for aiming for an early tranche for qualification testing in 2025. In order to be ready to do so, 2024 will be a crucial planning and preparation year for utilities. Some may review their existing suppliers and systems and find them all satisfactory, but many may find that change will be required. The only way to know which situation you may be in is to engage early, preferably with a data service provider which is deeply embedded in readiness for the MHHS SIT phase already. Preferably, this partner will be across the advanced, smart and unmetered data services, as well as the corresponding metering services, such as IMServ.

Of course, it’s always possible that implementation deadlines are pushed back, buying utilities some breathing room. It would be unwise to gamble on this being the case though – these dates already reflect the replan approved earlier this year and I suspect this will be a firm deadline. What’s more MHHS will be a license condition requirement, so such an approach would be rather cavalier.

It seems clear then: now is the time to get the MHHS house in order.

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