Friday, July 19, 2024

Why Market-wide Half Hourly Settlement is an energy opportunity not an administrative burden

Ben Whitelam

Ben Whitelam, Director of Commercial at npower Business Solutions (nBS)

Over the past few years, organisations across both the public and private sectors have experienced the impact of a highly volatile energy market.

As a result, the government has published several policies and strategies that have outlined its plans to strengthen the UK’s energy security and pave the way to net zero.

The overwhelming conclusion is that, for the UK to successfully decarbonise, and for organisations to benefit from a responsive, secure and low-carbon energy system, we need to radically reshape the way in which our energy sector operates.

This is because as we shift to more intermittent renewable power sources and decrease 24/7 fossil fuel generation, we’ll need to manage all aspects of electricity more efficiently.

So, in addition to decarbonising generation, we need to change the way we supply, trade, consume and interact with electricity – so that it becomes far more targeted, responsive and flexible.

A key enabler of this energy transformation will be Market-wide Half Hourly Settlement (MHHS) – a revolutionary project instigated by the government-appointed energy market regulator Ofgem. Set to be one the biggest transformations to the British electricity market since privatisation, at its heart is unlocking more granular and timely data to understand how and when all consumers use electricity.

So, what does this mean for public and private sector organisations?

Preparing for MHHS

The MHHS means that all organisations will be settled half-hourly, rather than relying on estimates and potentially inaccurate meter readings associated with old-style technology.

The  industry timeline for delivering MHHS starts in April 2025 and runs through 2026. The changes an organisation will see will depend on the type of meter you have installed. For example, if you already have an automated meter reading (AMR), Smart or Half-Hourly meter, it is unlikely that any change in meter will be required.

That said, while it won’t be a mandated requirement under MHHS for energy meters to be upgraded to AMR or Smart meters, there are multiple benefits for doing so. They allow consumption data to be extracted electronically without having to rely on manual meter reads, providing you with more accurate data so you can better manage your energy use. This can help to identify potential efficiencies and also means that energy invoices are based on actual consumption rather than estimated readings.

In addition, MHHS will mean an increase in the data available, so it is also important that organisations already have an understanding of their energy consumption.

There are intelligent tools and easy-to-use energy management platforms available that allow energy managers to visualise, track and analyse their consumption. They can also enable users to customise features and reporting, set alarms and compare sites to help maximise efficiencies and reduce costs and carbon emissions.

Using these platforms, such as our Intelligent Analytics tool, means your data can then be transformed into actionable insights that can be used across your organisation.

Greater accuracy brings greater opportunity

One of the primary benefits of the MHHS reform is the level of insight it will bring. Once implemented, MHHS will provide an incredible level of visibility into how much electricity is being consumed for every 30-minute period throughout the day and night – that’s 48 data points for every UK meter in every 24-hour period.

Having access to all this insight will help to support an energy system that can forecast, generate and distribute electricity far more accurately and efficiently than ever before.

MHHS will also support the more flexible use of electricity, which we’re already starting to see with ‘time of use’ tariffs emerging to incentivise the use of energy at times of abundant supply and away from peak-demand periods.

Consumers will benefit from more accurate rather than estimated bills, access to new products, more innovation, new technologies and flexibility services from suppliers, and ultimately a more cost-efficient energy system.

A flexible and responsive energy future

The energy industry is working together right now on the industry architecture that will enable so much more data to be processed.

The responsibilities of meter service providers are also changing, with new roles emerging for the gathering, analysis and delivery of meter data.

For organisations in the public and private sectors, it will pay to get ahead of the game by understanding your energy data, and by working with your meter operator, data collection and data aggregator service provider to ensure you are prepared for this important change.

While bringing a major shift in how the energy sector works, MHHS will also bring significant opportunities, particularly in terms of improved flexibility, the drive to net zero and – importantly – cost savings.

For more information, visit nBS’s dedicated MHHS information page.

This article appeared in the June 2024 issue of Energy Manager magazine. Subscribe here.

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