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Market-wide Half-Hourly Settlement: How it will work and its impact on consumers
Through the continued efforts of the smart meter rollout, over 70% of properties in Britain now have electricity meters capable of automatically recording and transmitting meter readings.
This digital revolution will enable a major change in the energy market: the Market-wide Half-Hourly Settlement (MHHS) reform.
MHHS will overhaul how suppliers buy and sell electricity, enabling the market to use actual energy consumption data every 30 minutes. This will lead to more accurate billing, smarter tariffs, and greater support for the transition to net zero. This guide to MHHS covers:
- What is Market-wide Half-Hourly Settlement?
- Why Market-wide Half-Hourly Settlement is happening
- How the Market-wide Half-Hourly Settlement affects businesses
- How will Market-wide Half-Hourly settlement work?
- What steps need to be taken to get to Market-wide Half-Hourly Settlement?
What is Market-wide Half-Hourly Settlement?
Market-wide Half-Hourly Settlement (MHHS) is a major reform in the retail electricity market that changes how energy suppliers pay for the electricity their customers consume.
Under the MHHS reform, nearly all electricity consumers, including households and small businesses, will transmit half-hourly energy consumption data.
Instead of relying on estimates, the reform will require accurate consumption data to settle suppliers’ purchases of electricity on the wholesale electricity market.
The change is being driven by the energy regulator Ofgem and delivered by Elexon, which operates the balancing and settlement processes for the electricity grid.
Why Market-wide Half-Hourly Settlement is happening
The electricity market settlement process ensures that suppliers pay for the electricity their customers actually consume, while generators and network operators are paid accordingly.
However, the current system relies on estimated consumption for most households and small businesses because live data is unavailable. This leads to discrepancies where the costs paid by consumers do not reflect the real costs they impose on the system.
Under Market-wide Half-Hourly Settlement, all suppliers will pay more for electricity consumed at peak times and less for electricity consumed during periods of low demand, with the following expected outcomes:
Time-of-use tariff innovations
The MHHS programme is expected to encourage suppliers to offer tariffs that incentivise consumers to adjust their electricity consumption to better reflect grid availability. For example:
- Dynamic time-of-use tariffs – A tariff where the domestic or business electricity price per kWh changes dynamically in line with actual market conditions. This encourages consumers to adjust their consumption in response to the condition of the grid.
- Critical peak period tariffs – A tariff that offers businesses a rebate for significantly reducing consumption during periods of exceptionally high demand on the grid.
- Vehicle-to-grid tariffs – A tariff for homes and businesses with EV chargers that allows charging to be dynamically timed to align with periods of low demand on the grid.
- Battery export tariffs – A Smart Export Guarantee tariff that enables the grid to utilise stored energy from solar batteries during periods of high demand.
Reducing the cost of electricity
Through the adoption of time-of-use tariffs, Ofgem expects that changes in consumer behaviour will lead to long-term reductions in electricity distribution costs:
- Reduced balancing system costs – Demand-side flexibility will reduce the need for the grid to activate older, more expensive fossil fuel power plants to meet demand. This will help reduce BSUoS charges for both businesses and households.
- Minimising infrastructure development – Demand-side flexibility will help lower peak demand on the grid, reducing the need for network upgrade work carried out by distribution network operators. This will help reduce DUoS charges for both businesses and households.
Supporting decarbonisation
The expected changes in consumer behaviour will also support efforts to decarbonise the national grid by:
- Encouraging investment in local battery storage – Adding more carbon-neutral backup power capacity.
- Reducing reliance on emergency backup power – Decreasing the need for gas power stations to fill shortfalls in demand.
- Enabling the integration of more renewables – Allowing the grid to absorb variable, weather-dependent power generation from UK wind farms.
Each of these measures will help reduce the carbon intensity of power supplied on the national grid.
How the Market-wide Half-Hourly Settlement affects businesses
Energy-intensive commercial properties with a half-hourly business electricity meter will largely be unaffected by the MHHS reform.
Our experts highlight the key impacts of MHHS on small and medium-sized businesses with other meter types.
Pricing based on time-of-use
The MHHS scheme will enable businesses of all sizes to take advantage of multi-rate business energy tariffs.
It is important to note that this is not mandatory; businesses can still choose a simple, single fixed-rate business energy tariff if preferred.
Above, we have listed a range of innovative new energy tariffs that are expected to become available as a result of the Market-wide Half-Hourly Settlement reform.
Smart data insights
MHHS will mean that all businesses generate granular, timely energy usage data through automatic meter readings.
This presents an opportunity for businesses to access business energy consumption data analytics through:
- An online portal provided by your energy supplier.
- Third-party business energy monitoring software.
- Installation of an Energy Management System.
These analytics will provide actionable insights for businesses, enabling them to improve business energy efficiency.
Demand flexibility opportunities
The MHHS scheme will allow businesses of all sizes to participate in demand-side flexibility schemes.
These schemes offer financial incentives for businesses to reduce energy use during periods of high grid demand.
The Demand Flexibility Service is available to SMEs, while the Balancing Mechanism is available to larger industrial users.
Meter operator costs
Most businesses pay meter operator costs through their business electricity standing charge.
MHHS will change the roles and responsibilities for meter communication and data aggregation.
It is currently unclear whether these changes will increase or decrease metering costs for most businesses.
How will Market-wide Half-Hourly settlement work?
To explain how Market-wide Half-Hourly Settlement will work, we will look at each element of the energy industry that will change and compare it with how it currently operates.
Metering of electricity usage
Currently, there are three separate metering processes in the energy market:
- Half-hourly meters – Properties with a high energy demand already have meters that transmit readings every 30 minutes.
- Smart meters – Meters that automatically send readings, but are usually configured to do so only once per day.
- Traditional meters – Meters that require manual meter readings, usually taken by suppliers once a year.
With the completion of the smart meter rollout and the introduction of MHHS, most older meter types will be upgraded to smart meters, which will be configured to transmit meter readings every 30 minutes.
Consumption data collection
Currently, the processes for data collection from smart meters and half-hourly meters use two separate systems of data collectors and aggregators.
The MHHS reform will centralise and standardise all metering and data services, with meter readings recorded and shared every 30 minutes.
Settlement process
The electricity market settlement process is how suppliers match the electricity they buy with the amount their customers actually use. The current system already settles usage in half-hourly intervals, using:
- Real-time consumption data from half-hourly meters.
- Estimates of half-hourly consumption for other meter types.
Under MHHS, the settlement process will be based on actual half-hourly consumption data from all meter types.
Settlement timeline
Currently, the market settlement process allows a 14-month period for adjustments based on physical meter readings from traditional meters.
The MHHS reform aims to enable a significantly shorter adjustment timeline, with settlement completed in just four months.
What steps need to be taken to get to Market-wide Half-Hourly Settlement?
Ofgem and Elexon have already defined how balancing and settlement will work and have built the systems that will operate balancing and settlement under the MHHS reform.
This section explains the next steps the industry must take to adopt Market-wide Half-Hourly Settlement.
Metering data readiness
Market-wide Half-Hourly Settlement depends on reliable, frequent, automatic meter data.
To support this, Ofgem has introduced a mix of regulatory obligations, commercial incentives and technical measures to drive widespread smart meter adoption.
As part of the ongoing rollout, suppliers must take all reasonable steps to install smart meters for their customers.
Migration of meters to half-hourly arrangements
In October 2025, Elexon started the process of migrating meters to half-hourly arrangements under its new settlement systems.
During migration, Elexon will run both half-hourly and non-half-hourly settlement regimes side by side, to accommodate suppliers using a phased approach to transitioning their customers to the reformed settlement process.
The migration process will take 19 months in total, with the aim of completing the transition to Market-wide Half-Hourly Settlement by July 2027.
Market-wide Half-Hourly Settlement timeline
Here is the timeline for the major milestones in the Market-wide Half-Hourly Settlement programme:
- September 2025 – Successful deployment of the MHHS central systems by Elexon.
- October 2025 – MHHS migration of MPANs began, with suppliers moving customers to new settlement arrangements.
- October 2026 – Elexon aims to have migrated 80% of meters to the new settlement arrangements.
- May 2027 – Deadline for MPAN migration.
- July 2027 – Ofgem’s target for completion of the MHHS programme.
What businesses need to do to prepare for Market-wide Half-Hourly Settlement?
There are currently no mandatory actions for businesses to take to prepare for MHHS.
MHHS relies on a smart business electricity meter installed at commercial properties to transmit automatic meter readings every 30 minutes. As part of the continued smart meter rollout, traditional “dumb” meters, including Economy 7 and Economy 10 meters, will be upgraded where possible.
We recommend checking a recent business electricity bill to confirm that automatic meter readings are being used.
If you want to take advantage of multi-rate business energy contracts, most business energy suppliers will accept upgrade requests from their customers.
Our free business electricity comparison connects businesses with the best multi-rate tariffs available on the market.
Market-wide Half-Hourly Settlement FAQs
Our business energy experts answer key questions that business owners are asking about the MHHS scheme.
How do I arrange a Market-wide Half-Hourly Settlement set up?
Individual businesses and households are not required to take any action for the MHHS scheme. All actions required to implement MHHS are the responsibility of energy suppliers and other participants in the energy market.
What is the Target Operating Model (TOM)?
The Target Operating Model (TOM) is the blueprint for how the settlement process will operate in the wholesale electricity market once MHHS is implemented.
TOM replaces the existing system with a streamlined, centralised model that enables all customers to be settled based on their half-hourly usage.
Can you switch energy suppliers during the Market-wide Half-Hourly Settlement transition?
Yes, the MHHS implementation has been designed to allow households and businesses to continue switching energy suppliers.
Find out more about the process in our guide to switching business energy suppliers.
What happens if my meter can’t provide half-hourly data?
As the Market-wide Half-Hourly Settlement programme progresses, your energy supplier will attempt to install a smart meter that can provide half-hourly data.
If automatic meter readings are not possible, the MHHS programme includes fallback mechanisms that allow estimated settlements.
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