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:

The ELEXON forward work plan for the Target Operating Model design work, last updated in May 2018, can be found here.

Publications and updates

  • Published: 22nd Mar 2019
  • Agendas, minutes and presentations
  • 3 Associated documents
The minutes, agendas and slides for the fifth meeting of the Design Advisory Board (DAB) was held on the 25th September 2018.

  • Published: 22nd Mar 2019
  • Agendas, minutes and presentations
  • 3 Associated documents
The minutes, agendas and slides for the sixth meeting of the Design Advisory Board (DAB) was held on the 27th November 2018.

  • Published: 12th Mar 2019
  • Guidance
  • 0 Associated documents
See our settlement reform update: March 2019.

  • Published: 19th Feb 2019
  • Guidance, Reports and plans
  • 0 Associated documents
The ELEXON-chaired Design Working Group has published a consultation on the preferred Target Operating Model to enable market-wide half-hourly settlement.

  • Published: 15th Feb 2019
  • Reports and plans
  • 4 Associated documents
The ELEXON-chaired Design Working Group has delivered a preferred Target Operating Model (TOM) to enable market-wide half-hourly settlement.

  • Published: 5th Feb 2019
  • Open letters and correspondence
  • 2 Associated documents
See our Call for Evidence on potential consumer impacts that may arise following electricity settlement reform and network access and forward-looking charging reform.

  • Published: 25th Jan 2019
  • Guidance
  • 0 Associated documents
Update on the Design Advisory Board membership for the Settlement Reform Significant Code Review.

  • Published: 19th Nov 2018
  • Guidance
  • 1 Associated documents
A letter providing Ofgem’s least regrets steer to the Design Working Group (DWG) on the outstanding policy questions that materially affect the design of the Settlement Reform Target Operating Model (TOM).

  • Published: 17th Sep 2018
  • Closed: 12th Nov 2018
  • Consultations and responses
  • 2 Associated documents
Consultation on our proposed position that our work on settlement reform should not include centralisation of agent functions.

  • Published: 17th Sep 2018
  • Agendas, minutes and presentations
  • 7 Associated documents
The minutes, agendas and slides for the fourth meeting of the Design Advisory Board (DAB) was held on the 12th June 2018.

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