Ofgem’s mandatory move to half-hourly settlements for all consumers extended
Ofgem’s huge project to switch to half-hourly electricity settlement (HHS) for almost all customers has been plaguing the business energy world for months. Now the remaining customers, including smaller businesses and domestic consumers, are being told they will have to adopt it as well.
Up to this point, only Profile Classes 5-8 have had to worry about P272, the Ofgem regulations designed to better align the buying, transport and selling of electricity.
Beginning in autumn 2015 almost all non-domestic consumers began making the switch to half-hourly capable meters, starting with those whose contracts were coming up for renewal.
Not a single supplier was excluded from this huge switch over, no mean feat for the UK energy industry.
Now, Ofgem has announced that the regulations will be extended to include Profile Classes 1-4, meaning that all energy usage data from domestic and the remaining non-domestic classes will soon be measured half-hourly.
This will overhaul the electricity settlement arrangements in the UK.
Ofgem’s intention is to open a Significant Code Review to decide how the rest of the country should be moved, which will result in a two-part plan.
The first part is to remove anything stopping elective HHS for any suppliers that wish to switch over early on. The second part involves the mandatory rolling out of HHS to ensure that all customers receive the full benefits of the changes.
All UK suppliers have been adapting to the changes required by the initial HHS demands, but a few have predicted this P272 progression and have rolled up their sleeves to prepare for the extra workload.
Opus Energy has partnered with IMServ in order to ensure a smooth transition within the company and for the customers who are experiencing changes to their billing for example.
The initial part of this process was identifying the industry processes that are utilised by both the half-hourly and non-half-hourly areas, and to use them as a baseline for a custom-designed program.
The most important aspect was to make the process scalable, allowing them to easily meet Ofgem’s new requirements as they are announced.
Whether or not suppliers are ready for the extension of the half-hourly regulations, Ofgem will supply a full cost benefit analysis and provide any possible options for reducing future costs.
Alternative methods for HHS will be considered and a recommendation will be made to remove any potential barriers to suppliers collecting consumption data more often than daily without explicit consent.
Although the switch over process might be painful in the short term, the longer term view promises more accurate billing and lower costs. Suppliers already purchase energy in half-hour blocks, so selling them in the same increments is only logical. The challenge is getting to that point.