Market Wide Half Hourly Settlement (MHHS) Reform and Advanced Billing Solutions: Transforming the UK Energy Landscape

UK Energy Landscape

The electricity market in the UK is influenced by various market participants, including generators, suppliers, and consumers. In the complexity of the supply and demand energy landscape, the adoption of Market Wide Half Hourly Settlement (MHHS) reform by October 2025 promises to be a key driver for transitioning to a smarter, more flexible energy system and a catalyst for innovation around pricing and billing in the sector. Smart meters, capable of recording energy consumption every half-hour, offer an opportunity to enhance the accuracy and timeliness of the settlement process. Тracking and settling energy consumption and production in half-hourly intervals encourages energy suppliers to devise innovative business models aimed at assisting consumers in transitioning away from peak usage or price periods. This advancement also enables the utilization of new products and services supporting low-carbon generation sources such as wind, solar, and nuclear, resulting in many beneficial ways like reduced bills, lower environmental impact, improved supply reliability, and better service quality for consumers.

Challenges Related to Settlement Runs

Every supplier in the market, whether consumer or producer enters into communication with different regulatory bodies and authorities such as ELEXON, National Grid, etc. The financial mechanisms of these relationships are highly dynamic and detailed, data is received 48 times per day and includes invoicing based on initial, reconciled, and final consumption data. The full settlement requires several rounds of reconciliation, where the entire process can take up to a few months after the electricity is consumed and invoiced to the customer. This extended duration of settlement runs presents significant challenges and uncertainties for the energy suppliers, especially for the large generators.

A Comprehensive Solution for Settlement Management

Energy suppliers burdened by partial and very often inconsistent data received from multiple sources face critical concerns regarding data management, validity, and robustness.

This is where digital technologies play a crucial role in managing the entire settlement procedure and assisting organizations in effectively handling their financial flow and volume allocation.

As a SaaS provider, we believe that accurate data that ensures a smooth billing process is pivotal for the utility companies’ success.

Recognizing the demand for automated digital tools, we developed a solution empowering energy companies to control and manage efficiently all settlement run versions along with all the data related to each version.

Even though the data is received from various sources, in our system each settlement run is registered meticulously, capturing all necessary details. In this way, enabling effortless comparison of different settlement periods for one or multiple Meter Points (MP), allowing for comprehensive analysis and detection of discrepancies. Moreover, the system maintains multiple versions of consumption data (actual, estimated, corrected) to uphold accuracy and integrity throughout the comparison process. With clear and transparent visualization, all stakeholders can easily obtain actionable insights by the comparison of settlements for specific dates or periods.

By having all this information at their fingertips, suppliers can seamlessly kickstart the billing process. Our billing system then leverages settlement-associated data, ensuring invoices are based on the latest run for each period, guaranteeing accuracy and promptness. It conducts real-time calculations of all industry charges using predefined formulas and accessible data. Additionally, our solution offers the flexibility to maintain different price categories to cater to diverse product requirements, providing different billing options tailored to suppliers’ needs, ultimately enhancing operational efficiency and customer satisfaction.

The system not only monitors and tracks data reception with precision but also proactively alerts users in case of any missing data that requires attention. It enables tracking of half-hourly consumptions from data providers, DNO industry files, and invoices, as well as crucial ELEXON parameters for half-hourly billing, such as Transmission Loss Multipliers and Line Loss Factors.

In conclusion, the adoption of MHHS reform marks a transformative milestone for the UK energy landscape. This transformation promises to drive the transition towards a smarter, more efficient energy system, encouraging innovation in pricing and billing practices. In response to these challenges, the integration of digital technologies becomes imperative to streamline the settlement management process and help organizations to efficiently control their financial flow and volume allocation. Our market-compliant software solution serves as a robust tool in this regard, enabling energy companies to oversee and manage settlement run versions in detail, thereby guaranteeing precision and transparency in data management and invoicing processes.

If you're interested in leveraging our MHHS solution, or if you’d like to explore how Methodia can support your business, please contact us at: https://www.methodia.com/talk-to-expert