The energy regulator has outlined its plans to look at the introduction of mandatory half-hourly settlement (HHS) as part of efforts to create a more flexible power system.

Ofgem has launched an industry code review to work with industry and consumer groups to assess whether it should require all consumers with smart meters in Great Britain to be settled using their half-hourly data.

Since April this year, all medium and large businesses must be settled on their half-hourly electricity use under code modification P272, which was raised by SmartestEnergy.

From July 2017, suppliers who want to are also able to settle their small business and domestic consumers using their half-hourly data.

Ofgem has now published a letter detailing its responses to submissions made to a consultation on mandatory HHS, which closed in November 2016.

The statement launches the Electricity Settlement Reform Significant Code Review (SCR) and sets out its revised timetable following the consultation.

The watchdog plans to publish a draft business case for mandatory HHS in the middle of 2018, with a full business case following in the second half of 2019.

‘Smarter system’

Ofgem said HHS promotes innovation and competition in the energy market and give consumers the opportunity to make savings on their energy bills.

It is also hoped it will help create the right environment for more demand-side response, leading to a more efficient and secure energy system and help suppliers forecast demand more accurately, strengthening competition and reducing costs.

It should also make the settlement process faster and more efficient, reducing barriers to entry to the energy market.

“For the electricity system as a whole, half-hourly settlement will help suppliers, network operators and generators understand when and where energy is being used.

They can then target when and where to invest in the energy network, and avoid building expensive extra power stations and putting up more poles and wires than are needed,” said Anna Stacey, Head of Settlement Reform at Ofgem in a blog published on the regulator’s website last week.

> Read Ofgem's consultation letter