What is Market-wide Half-Hourly Settlement (MHHS) and how does it work?

Market-wide Half-Hourly Settlement (MHHS) is an Ofgem-led programme that changes how electricity is billed in the UK. Instead of relying on estimated usage or daily smart meter data, suppliers will use half-hourly meter readings to charge customers for the electricity they actually use.

This will apply to both domestic and non-domestic meters. As well as accurate billing for customers, half-hourly metering will help ensure suppliers are compensated or charged for any shortfalls or excesses in their contracted electricity.

It should ensure households and businesses are billed fairly, based on real-time energy use, and will run alongside the ongoing smart meter rollout. If you don't have a smart meter, the half-hourly settlement will be based on annual consumption estimates and property type.

Here's all you need to know.

Why is energy settlement important?

Energy settlement is the process of matching the amount of electricity suppliers buy from generators with the amount of energy customers use. This has often relied on estimates, especially for homes and smaller businesses without half-hourly meters, which can lead to inaccurate billing. 

MHHS ensures that usage is accounted for every half hour, making bills more reflective of actual consumption and helping suppliers and generators balance the grid.

What is changing under MHHS?

By 2027, all domestic and business electricity supply points will be settled using half-hourly data. This shift involves rolling out smart meters where possible and updating industry systems. But you don't need a smart meter to benefit from half-hourly metering, as we explain below. 

Here's a breakdown of how it will work:

• If you already have a smart meter, it will automatically provide half-hourly data.
• If you do not have a smart meter, your usage will still be settled half-hourly based on estimates considering your annual consumption and property type until you upgrade.
• Energy suppliers, brokers, and comparison tools are updating their systems to handle industry changes like new settlement codes and the phasing out of old profile classes.
• Consumers will see new information and terminology on their energy bills and contracts as part of this transition.

What are the benefits of market-wide half-hourly settlement?

MHHS aims to modernise the UK energy market and provide a range of benefits for both domestic and non-domestic energy users.

Benefits for all energy users

• More accurate billing: Electricity bills will more closely reflect the energy you use, reducing reliance on estimates or outdated meter readings.
• Greater transparency: You’ll receive near-real-time billing updates, making energy costs more predictable and easier to manage.
• Increased tariff choice: Suppliers are incentivised to create innovative tariffs, including time-of-use tariffs and dynamic pricing, meaning you may be able to save money by shifting usage to off-peak times.
• Support for net zero: With more granular data, the system can use renewable energy more effectively and reduce waste, helping the UK meet its environmental targets.

Benefits for business energy users

• Cost control: Businesses, especially those with flexible or shift-based energy needs, can save by shifting consumption to cheaper periods.
• Procurement advantage: Detailed consumption data allows businesses and business energy brokers to negotiate better energy contracts and participate more actively in demand flexibility or grid balancing schemes.
• Streamlined admin: Billing and contract information will gradually become simpler, as old profile classifications are phased out.

Benefits for domestic energy users

• Personalised tariffs: Time-of-use pricing and upcoming innovations will make it easier for households to control bills and take advantage of cheaper rates.
• Preparation for a smarter future: Smart meters and MHHS pave the way for home battery storage, electric vehicles, and better tools for managing your home’s energy footprint.

What is the MHHS rollout timeline?

The testing phase has been underway since 2024. Here are the key MHHS dates to look out for:

• September 2025: Supply points across the UK start moving to MHHS. This should take about 18 months.
• October 2026: All domestic and business electricity customers are expected to be on use half-hourly settlement.
• May 2027: The new system is fully operational, supported by Ofgem, Elexon and energy suppliers.

Businesses with high electricity demand may already use half-hourly meters, but MHHS ensures all companies are included. Households with smart meters will automatically be migrated to half-hourly settlement.

During this period, you may see changes to your bills, new contract terms, and notifications from your supplier or broker.

How does MHHS impact your bills and contracts?

Although you don't need to do anything and probably won't notice much of a difference apart from more accurate bills and no need to send meter readings, there are a few things to look out for.

• Your MPAN (the reference number for your meter) may change; old codes are being replaced with new identifiers suitable for half-hourly data.
• Profile class information will disappear for migrated meters.
• Expect clearer, more precise contract wording and options to access new tariffs.
• The settlement window (the time suppliers have to balance and pay for your usage) will shorten, making the system more responsive and transparent.

Here's how MPAN numbers will change under MHHS:

Why is the UK moving to MHHS?

MHHS is designed to modernise the energy system, improve billing fairness, and promote smarter, greener energy usage. Here are some of the ways the scheme plans to do that:

• It helps balance supply and demand at a national level, making better use of renewable sources and flattening expensive peak demand periods.
• Innovation will follow, with suppliers and technology providers offering new services and savings linked to how and when you use electricity.
• Ofgem estimates net benefits for UK consumers between £1.6 billion and £4.5 billion by 2045 from improved efficiency, transparency, and grid flexibility.

How to prepare for market-wide half-hourly settlement

The rollout is happening now and is fully automated, so you don't need to do anything to switch to half-hourly metering (though installing a smart meter may help). Even so, here are some things to consider:

• Check your meter: Make sure you have a smart meter. If not, contact your supplier about an upgrade to unlock the most benefits.
• Review your tariff: Ask about time-of-use or flexible tariffs that could help you save money.
• Stay informed: Look out for updates from your supplier or broker about how your bills and contracts might change. Compare business energy quotes to find more cost-effective deals as the market evolves.