Electricity settlement

Electricity settlement

The electricity settlement process places incentives on suppliers to buy energy to meet their customers’ demand in each half hour of the day. Accurate and timely half-hourly consumption data from smart metering could significantly improve the quality of settlement, which in turn could encourage innovation and efficient use of energy.

We consider it is in consumers’ interests to be settled using half-hourly consumption data from smart meters. Suppliers can already choose to settle consumers half-hourly through our elective half-hourly settlement work. We expect, however, that we will have to require that all suppliers do this in order to maximise consumer benefits.

Looking forward

In July 2017, we launched our Significant Code Review, which sets out our revised timetable following our November 2016 consultation on the timetable for reform for market-wide half-hourly settlement (previously mandatory half-hourly settlement). The decision on whether to require that all suppliers across the market settle half-hourly will be made in the second half of 2019 and is subject to cost-benefit analysis.

HHS has a fundamental role in delivering the Smart Systems and Flexibility plan which could save consumers up to £40bn off their energy bills in the coming decades.

Approach to design of the Target Operating Model

One of the key outputs of this Significant Code Review is the development of a Target Operating Model to deliver Market-wide Half-hourly Settlement. To achieve this we have set up the following design bodies:

Publications and updates

  • Published: 11th May 2018
  • Agendas, minutes and presentations
  • 3 Associated documents
The minutes, agendas and slides for the third meeting of the Design Advisory Board (DAB) was held on the 14th March 2018.

  • Published: 2nd May 2018
  • News and blogs
  • 0 Associated documents
The ELEXON-led Design Working Group has published a consultation on the skeleton Target Operating Models to enable market-wide half-hourly settlement.

  • Published: 2nd May 2018
  • Decisions
  • 0 Associated documents
Ofgem has undertaken a review of the membership of the DWG to ensure that it remains appropriate for stage 2 of the TOM design work.

  • Published: 12th Apr 2018
  • Decisions
  • 1 Associated documents
Ofgem has made a decision to approve the skeleton TOMs for market-wide half-hourly settlement delivered by the ELEXON-led Design Working Group.

  • Published: 28th Mar 2018
  • Open letters and correspondence
  • 1 Associated documents
An initial working paper in relation to the question of whether or not to centralise functions currently performed by supplier agents.

  • Published: 19th Mar 2018
  • Agendas, minutes and presentations
  • 3 Associated documents
Ofgem has published the minutes and presentation materials for the second Design Advisory Board to the Target Operating Model for half-hourly settlement.

  • Published: 9th Mar 2018
  • News and blogs
  • 0 Associated documents
Half-hourly Settlement update: March 2018.

  • Published: 6th Mar 2018
  • Decisions
  • 0 Associated documents
Update on the Design Advisory Board membership for the Settlement Reform Significant Code Review.

  • Published: 19th Feb 2018
  • Agendas, minutes and presentations
  • 3 Associated documents
Ofgem has published the minutes and presentation materials for the first Design Advisory Board to the Target Operating Model for half-hourly settlement.

  • Published: 9th Feb 2018
  • Guidance
  • 0 Associated documents
ELEXON will be holding a stakeholder seminar to inform stakeholders on the MHHS Target Operating Model (TOM) design work to date.

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