Preparing for market-wide half hourly settlement: a guide for energy suppliers
Tristan Fowler, Head of Product (Market Connectivity)
By switching all customers to be settled half hourly – rather than relying on estimates and periodic meter readings – the move to market-wide half hourly settlement (MHHS) is set to be one of the biggest transformations to the British electricity market to date.
Transitioning to a billing system that reflects consumers’ actual electricity consumption is expected to save consumers money, support energy flexibility, and facilitate the balance of demand and supply.
At the same time, MHHS represents an unprecedented opportunity for energy suppliers to participate in a flexible, dynamic and forward-looking energy market – and to launch new and competitive products. But to make the most of these changes and adequately support their customers, utilities will need to prepare.
So, here are some areas to prioritise for energy suppliers looking to future-proof their operations, as well as an overview of how ENSEK can help.
Updating the tech stack
One of the main challenges posed by MHHS for utilities is the huge amount of data they will need to handle. This can put a significant strain on existing resources, and those relying on legacy systems are likely to feel the pressure to upgrade.
With 48 meter readings a day to process, your system needs to be able to cope without compromising on resilience and reliability. If your platform is struggling to keep up now, “data deluge” is a concrete risk once the MHHS becomes a reality.
To avoid being overwhelmed by big data, we suggest relying on cloud native, SaaS solutions that are built with enterprise-grade scalability in mind. Cloud native hosting is inherently scalable, and allows software to accept additional users and process an exponential amount of data without compromising on performance.
An added benefit is that cloud native hosting also offers improved cybersecurity – safeguarding utilities against malicious attacks, which are likely to increase during periods of industry transformation.
ENSEK’s cloud native, SaaS platform includes powerful data insights, underpinned by our industry-leading market integration software. We’ve made MHHS compliance easy, from our full stack solution to bare bones DIP integration. We can cater for both B2B and B2c suppliers and non supplier parties.
Enhancing product offering
MHHS is expected to push utilities to adjust their product offering, launching products that encourage energy users to consume less electricity during peak times.
This practice, known as load shifting, helps to balance the grid by preventing spikes in demand and accommodating the needs of renewable power generation – which is often intermittent and volatile.
In preparation for MHHS, utilities can encourage load shifting by increasing and diversifying their time-of-use tariffs, which encourage consumers to use energy at off-peak times. Another possibility is to promote the use of battery storage to I&C and larger SME customers, explaining the benefits of storing renewable electricity produced on site to use it at times of high demand.
Whether they already offer attractive incentives for load shifting or are thinking of bringing forward new products, future-proofing operations will be a priority for utilities. By relying on a platform that helps manage product complexity, energy suppliers can implement a dynamic product portfolio without overwhelming their teams.
ENSEK’s platform already offers time-of-use tariffs, EV tariffs and half hourly billing, and we’re really excited about the opportunities that MHHS will enable.
“We see real value to suppliers and customers in creating an ecosystem of new tools and features,” commented Tristan Fowler, Head of Product (Market Connectivity) at ENSEK. “From ENSEK, these include an enhanced billing suite and demand side response integration, a half hourly gross margin model for suppliers, powerpack and specific kWh volume, period pricing, ad-hoc half hourly or hourly peak promotions, as well as half hourly or hourly demand forecasting.”
Supporting residential customers
With benefits for consumers predicted to oscillate between £1.6 and £4.5 billion, MHHS is expected to bring some relief to households impacted by the energy crisis. However, while time-of-use tariffs can lead to significant savings, oscillating energy prices might make it harder for people to budget.
To prevent unexpected cost increases and “bill shock” from domestic customers, utilities should focus on accurate and timely billing. By investing in a solid end-to-end billing solution and doing the basics right, they will improve CSAT, minimise the need for customers to get in touch, and consequently reduce cost to serve. It’s also advisable to look into debt management solutions to support financially at risk customers and have adequate systems in place for a frictionless debt recovery process.
MHHS represents a huge change for energy suppliers, and challenges are likely to arise as a consequence. However, the chance to future-proof operations, launch new products and participate in a flexible and dynamic market will also bring value to utilities willing to innovate.
As MHHS matures, there is an amazing opportunity to deliver a step change for customers and support the drive to net zero, with:
point in time or real-time payment adequacy calculations and monitoring for proactive management of any procedural credit/debit forecast – avoiding term-based re-assessment
incentive-based localised portfolio grid optimisation packages for DNO investment
carbon reduction packages based on prevailing carbon intensity of the grid (GSP or nationally)