What is the Market-Wide Half-Hourly Settlement (MHHS) Reform?

Summary

Market-wide half-hourly settlement (MHHS) is a new programme of sweeping reforms designed to modernise the UK’s energy industry. The significant reforms are being led by energy regulator Ofgem, and are expected to bring a wide range of benefits to businesses and consumers, with the main changes due to come into effect between May 2026 and May 2027.

What is MHHS?

Essentially, the new rules are all about modernising the way energy is tracked and billed to make the UK’s energy network more flexible and smarter.

The reforms will improve how we record energy consumption by mandating that energy usage is settled in half-hour intervals. With more frequent energy settlements, the electricity sector will have a much more detailed overview of consumers’ energy usage by making readings more accurate and transparent.

To comply with MHHS, businesses will be required to install modern smart meters capable of making half-hourly recordings.

When will MHHS reforms take effect?

Although a lot of work has already been going on behind the scenes to get systems and processes ready, industry regulator Ofgem has announced its timeframe for the reforms. Its phased approach ensures energy providers and businesses have enough time to switch over to the new system.

Key dates including:

• September 2025: the beginning of an 18-month industry-wide ‘migration’ to the new MHHS system
• May 2026 to May 2027: all MPANs (the unique number that identifies your electricity meter) will migrate over to the new model during this period
• July 2027: the target completion, at which point the industry will be on a four-month settlement timetable, rather than the current 14 months

Why are the MHHS reforms being introduced?

MHHS, and more specifically the half-hourly settlement, is a necessary step towards wider industry reforms that will change the way the UK buys, generates, and stores energy.

More accurate data

Changing to a half-hourly settlement gives more accurate meter readings, which in turn gives an overall more accurate picture of how consumers use energy. This will help the industry make better predictions about demand and enable it to meet future energy needs now.

Flexibility

With more accurate data, energy suppliers will be incentivised to offer their customers new products and time-of-use tariffs that are based on flexible energy usage. In particular, the reforms will encourage consumers to shift their usage to off-peak times (like overnight), helping to balance the grid and avoiding the need for extra fossil fuel-burning generators when demand peaks.

Cost savings

By adopting flexible energy schemes and tariffs, it’s hoped the reforms will allow businesses to lower their energy bills, with Ofgem predicting benefits to British consumers of between £1.5 billion to £4.5 billion by 2025.

What are the benefits for businesses?

The MHHS reforms are expected to benefit businesses in different ways:

SMEs

With more accurate billing based on actual usage, rather than estimates, smaller businesses will benefit greatly from MHHS as it gives them a more accurate picture of how and when they use energy.

This should allow them to create data-driven energy saving strategies that could reduce their costs. But it will also create a more competitive energy market, which could result in SMEs having a wider range of, and more tailored, tariffs to choose from.

Larger businesses

Although most large businesses are already operating within half-hourly contracts, such as large industrial and commercial consumers, the detailed data they will have access to will in turn allow them to further optimise their operations and access to more competitive energy tariffs.

Plus, MHHS supports sustainability objectives and Corporate Social Responsibility (CSR) goals by encouraging more effective energy management systems and give businesses a more accurate way of measuring their carbon emission reductions.

How will MHHS affect consumers?

Just like with businesses, energy customers (i.e. households) will similarly have access to even more granular data under MHHS, as well as smarter meters and a wider range of time-of-use energy tariffs to choose from.

These should reduce energy bills for consumers, whilst also allowing them to help the UK’s energy network to balance demand and stabilise the grid.

However, consumers should be aware that if their energy isn’t settled half-hourly, there isn’t currently an option to make the switch to half-hourly settlements, as this is entirely dictated by the energy supplier – although this could change in the future. This unfortunately means for customers not on half-hourly settlement, they can’t take advantage of reactive and flexible smart charging.