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:

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: 17th Sep 2018
  • Closing: 12th Nov 2018
  • Consultations and responses
  • 1 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.

  • Published: 7th Sep 2018
  • Guidance
  • 0 Associated documents
Settlement Reform update: August 2018, including notification of stakeholder workshop to be held on 1 October 2018

  • Published: 17th Aug 2018
  • Reports and plans
  • 2 Associated documents
The Outline Business Case is the second iteration of the Business Case for market-wide settlement reform.

  • Published: 16th Jul 2018
  • Guidance
  • 0 Associated documents
Half-hourly Settlement update: July 2018.

  • Published: 10th Jul 2018
  • Closed: 3rd Sep 2018
  • Consultations and responses
  • 3 Associated documents
Our consultation on access to half-hourly electricity data for settlement purposes.

  • Published: 6th Jun 2018
  • Decisions
  • 1 Associated documents
Ofgem has decided to appoint a new member to the ELEXON led Design Working Group developing the Target Operating Model.

  • 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.

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