Ofgem Decision to Roll Out Half-Hourly Settlement Welcomed

Metre readings and savings - Ofgem

SOLAR ENERGY UK has welcomed plans to roll out market-wide half-hourly settlement across the retail electricity market by regulator Ofgem.

The decision will unlock a new era for solar and energy storage technologies, which can be used to underpin a smart, flexible energy system and deliver vital grid balancing, according to Solar Energy UK.

Half-Hourly Settlement

Half-hourly settlement means the national grid system will send accurate signals to suppliers about their customers’ electricity use and the cost of serving those customers throughout each day. This, it is hoped will incentivise suppliers to offer new tariffs and products that encourage more flexible use of energy. It should also help consumers to lower their bills, by for example, operating time of use tariffs, automation, vehicle to grid solutions and battery storage.

The settlement optimises the use of existing infrastructure and should reduce the need to build expensive new generation. This will become increasingly important as electricity consumption increases with a move to more electric cars and heating.

Ofgem estimates that half-hourly settlement will save consumers an estimated £1.6 billion to £4.5 billion by 2045.

Ofgem plans on implementing the new system over a four and a half year period, with extensive testing due to take place prior to launch in October 2025

Chris Hewett, chief executive, Solar Energy UK said: “One might question the overly cautious length of time set aside for testing in the midst of a climate emergency, but otherwise it is fantastic to see Ofgem is moving the dial on the matter of half-hourly settlement. The decision will undoubtedly enhance innovation in the market, and the role of solar and battery storage in supporting the grid.”

A report published by Solar Energy UK last year revealed that the UK requires 4.4 million homes to be equipped with smart solar PV and battery storage in order to cost-effectively manage electricity demand.

The increasing electrification of heat and transport has enhanced the case for on site solar energy generation and storage in residential and commercial settings, and half-hourly settlement is poised to drive demand for these technologies.

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