The UK electricity market will greatly change in 2026 with the introduction of a new system called Market-Wide Half-Hourly Settlement (MHHS). This will change how electricity consumption is taken, settled, and charged for all businesses, with direct implications for UK electricity pricing and energy pricing in the UK. There is no doubt that these changes to the market will have a wider effect on businesses because they will need to alter their costs, their procurement strategies, and their risk management of electricity purchases, particularly when reviewing business energy rates.
By preparing early for these changes to the market, businesses will benefit from a clearer view of their energy costs and will also have greater control of their electricity spend once the new settlement system goes live. Businesses that do not prepare for this change will find themselves facing higher costs and very limited flexibility when it comes time to settle on the new settlement system or conduct an effective energy comparison.
This article will provide a snapshot of what changes will be made under the new MHHS settlement system and what businesses should currently do to prepare for this change.
Market-Wide Half-Hourly Settlement refers to the fact that all electricity consumption will be settled on the basis of actual half-hourly data, as opposed to estimated profiles. Until now, only the biggest electricity users with half-hourly meters have been settled on actual consumption data. Most small and medium-sized businesses were profiled, meaning that their consumption was estimated according to standard usage profiles for similar premises, often limiting visibility into true business energy rates.
As of 2026, every business electricity supply will be switched to half-hourly settlement by default. Suppliers will be charged on the basis of actual consumption recorded every 30 minutes, and these costs will be passed on to their customers by business energy suppliers. The new system is being implemented by Elexon, regulated by Ofgem, and is expected to be fully implemented in the market in 2026, impacting UK electricity pricing across the sector.
MHHS enhances precision in electricity pricing; however, it also eliminates the safeguard that estimated consumption profiles previously offered. With the new system, companies will be charged not just for their electricity consumption, but also for the timing of that usage, which is a key driver of energy pricing in the UK.
This carries significant cost repercussions. Companies facing unregulated peak demand, concurrent equipment activations, or energy-heavy processes operating during expensive hours may experience increased electricity costs and higher commercial energy rates. Simultaneously, organisations that grasp their demand trends and use energy management systems to adjust or even out consumption will be more equipped to lower their average unit expenses.
Essentially, MHHS enhances transparency and accountability, encouraging knowledgeable energy management and revealing inefficiencies that were once concealed.
Aspect | Before MHHS (Profiled Settlement) | After MHHS (Half-Hourly Settlement)
How usage is measured | Estimated using standard industry profiles | Measured using actual electricity use every 30 minutes
Accuracy of costs | Lower, with peaks averaged out | High, reflecting real demand patterns
Exposure to peak pricing | Limited | Fully exposed
Billing transparency | Low | High
Cost optimisation potential | Minimal | Significant for prepared businesses
This table demonstrates why MHHS is a paradigm shift in the calculation and management of electricity costs and why traditional energy comparison methods may no longer be sufficient.
While MHHS doesn’t automatically require all businesses to have half-hourly measuring devices, they do require that all businesses utilise half-hourly capable data. There are already numerous smart meters and other automated metering devices that collect data at half-hourly intervals, but some older-style legacy meters may not be compatible and will require upgrading before full implementation of MHHS.
In addition to the meter itself, data quality will be critical. The half-hourly readings must be collected and validated correctly and transferred seamlessly into the settlement systems without gaps or errors. Companies that historically haven’t given much attention to their metering or energy management systems will need to focus on improving these issues, as mistakes made under MHHS could result in missed settlements and chargebacks from business energy suppliers.
Preparation for MHHS must start well in advance of the actual implementation date. The top priority for any company is to determine its existing status. This includes evaluating metering setups at every location, verifying if meters can provide half-hourly data using a smart meter, and confirming that data is accurately gathered and processed. For organisations with various locations, this process frequently reveals discrepancies that were missed during the settlement profiling.
Businesses need to collaborate with suppliers and metering partners to confirm that settlement is prepared for MHHS. This requires verifying data collector appointments, settlement categories, and confirming that there are no current issues that might lead to complications when the profiled settlement is deleted. Within MHHS, the precision and integrity of data are essential to avoid billing inconsistencies and unnecessary financial risks linked to business energy rates.
Careful evaluation of energy contracts is a must. Many of the existing contracts were priced using average levels of consumption, and under the new MHHS settlement system, it will be necessary to examine time of usage as the primary driver of pricing, particularly in relation to energy pricing in the UK. Companies with contracts expiring in 2025 and/or 2026 may wish to consider whether or not their current fixed versus flexible purchasing strategies are still suitable and whether commercial energy rates reflect how energy is currently consumed at their location.
To effectively manage costs under the new MHHS settlement system, companies need to analyse half-hourly consumption patterns, often supported by energy management systems. This is because the new system will identify when usage occurs and will provide information on both peak periods of demand due to start-ups of equipment, operation of HVAC systems, and/or scheduling activities. Companies can achieve significant savings by making relatively minor adjustments to their operations, all of which will become apparent after the new half-hourly settlement process is fully in place.
Financial modelling of the MHHS is taking place by forward-thinking companies. By running scenarios, companies can assess possible cost increases and find ways to shift their demand profile, as well as improve their ability to get their budget accurate when reviewing UK electricity pricing. This proactive approach provides businesses with greater certainty, enabling them to gain control of their energy strategy in advance of the market change impacts.
E for Energy supports organisations with their MHHS requirements and takes an approach that considers MHHS to be a business opportunity as opposed to a compliance-related function. Partners are able to realise cost-effective benefits from metering accuracy, data integrity, and tariff optimisation when working with experienced business energy suppliers such as E for Energy.
Support includes meter and data audits, MHHS readiness assessments, contract reviews, and in-depth analysis of half-hourly consumption to identify potential savings for the business. The end goal is clear: to ensure that a business is not only ready for MHHS but also has an increased competitive advantage through better business energy rates.
Market-Wide Half-Hourly Settlement will impact all UK businesses that consume electricity. Although the change promotes greater transparency in UK electricity pricing, it also presents a risk for those who fail to prepare.
Those who take action will benefit from greater understanding, control, and flexibility when carrying out an energy comparison or negotiating commercial energy rates. Those who delay may find that MHHS becomes a burden that they could have avoided. The best strategy is to prepare in advance and view MHHS as a change to be managed, not an adjustment to be made.