Energy suppliers issued warning over delays to scheme which could cut bills by up to £332
Energy suppliers have been told that any further delays to the implementation of a new scheme which could cut energy bill costs will “not be tolerated”
The warning came from regulator Ofgem and Secretary of State for Energy and Climate Change Ed Miliband, who wrote to the CEOs of the UK’s major energy suppliers today. The scheme in question is the Market-wide Half Hourly Settlement (MHHS) programme.
The system sends accurate signals to suppliers about the cost of energy throughout each day, which they can then use to encourage customers to take on a more flexible approach to their energy usage. For example, it could help encourage customers to switch to a tariff which offers that offers cheaper energy at specific times of the day or when there is more renewable energy on the grid – for example, when the wind is strong.
According to data from the Department for Energy Security and Net Zero, households could save £38 a year by switching from a variable tariff to a dynamic tariff and running dishwashers and washing machines during off-peak hours. Electric vehicle owners could also save an estimated £332 a year by charging their vehicles through a time-of-use tariff during off-peak hours at night.
In 2024, Ofgem agreed to a request from Elexon, the system’s implementation manager, to delay the MHHS programme for six and a half months to give them more time to test the new system. Ofgem also asked for assurances that the programme would work as intended, is being robustly tested, and would benefit customers.
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.In the joint letter, Milliband and Ofgem Chief Executive Jonathan Brearley say they are “extremely disappointed” that the progress on industry testing last year was “so slow” that they were forced to delay it.
The letter reads: “We are clear that there should be no further delays. This determination extends not only to the rest of the testing phase, but also through the qualification and migration phases, and the switchover to the faster settlement timetable. We have already met with the CEO of Elexon to ask for assurances that the Programme will not slip further.”
Energy customers’ migration to the new MHHS system is set to begin in October 2025. Where consumers have consented to share their data, suppliers will be more likely to offer new and innovative tariffs, which Ofgem and the government hope will give people access to cheaper bills and give them more control.
Ofgem is now consulting on a regulatory measure package to speed up the implementation of the MHHS programme and is reviewing industry responses on how to do this. These responses will help set out how suppliers can allocate their resources to meet delivery milestones and avoid delays.
Jonathan Brearly told the Mirror that he knew it was “really tough” for people to afford their energy bills right now. Added: “That’s why we’re doing whatever we can to cut bills – recently making prepayment meters the cheapest way to pay for energy. We want to see more flexible tariffs on the market that give consumers more control and help them save money by using energy when demand is low, or when it’s windy or sunny.”
He added: “As the energy regulator, we do our best to pass savings onto customers and shield them from rising costs. The MHHS programme could bring down bills and reduce emissions, but it needs the industry to do its bit.
“Last year we made the tough decision of approving a delay to the scheme to give the industry more time to get this right.
“But we’re drawing the line on any further delays. We’ve written to the energy companies involved to set out some new ground rules, along with a consultation seeking views from the industry on how best to implement the programme on time.
We’re acting now to prevent any more hold ups and get consumers the savings they need.”
Energy Secretary Ed Miliband said: “Households should be able to cut their bills by taking advantage of cheaper electricity at off-peak times. We’re calling on energy suppliers to use the most accurate half-hourly data so they can offer more tariffs that help reduce bills and support a flexible system to lower costs for everyone.
“But delays mean customers are missing out on opportunities to save money. Energy companies need to step up their efforts and we won’t accept further setbacks as we build a fairer energy system that helps to deliver on our plan for change to protect bill payers.”
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