Energy regulator Ofgem is introducing a big change to the way we are billed for electricity.
Because manual meter readings might not happen for weeks or even months, it’s impossible for suppliers to get a real-time picture of those customers’ consumption. So they use other data, like your past consumption patterns and national averages, to create an estimate for your bills. They adjust the sums when they get an up-to-date reading.
Better than a squint in the cupboard
Ofgem has now decided that this is not accurate or timely enough. Suppliers and generators do their buying and selling of electricity in half-hourly segments. Smart meters are capable of recording a customer’s usage in half-hourly intervals. So it no longer makes sense for suppliers to bill a customer based on the figures the meter showed when they squinted into their under-stairs cupboard three weeks ago.
Hence the forthcoming move to Market-wide Half-Hourly Settlement, or MHHS. Suppliers will be obliged to switch all their customers – domestic and business – to half-hourly meters by 2026. This means much more granular consumption data and the possibility of more accurate billing. It opens up the possibility for everybody to use energy more smartly and for suppliers to incentivise this behaviour in their customers (such as lower rates at off-peak times).
Energy platform launched by the supplier. The platform, developed by Alliander and adapted to Harz Energie’s needs and requirements, brings a transparency to locally generated green energy at individual plant level. The platform will be particularly attractive to those operators with plants that will no longer receive assistance under the Renewable Energy Sources Act (EEG) from 2021 onwards. The first plants have already signed up.
Why not REGOs too?
For the record, we wholeheartedly support MHHS. But if granular data is such an important tool for accurate billing and improving consumption patterns, why aren’t we using it for green certificates too?
The current system allows suppliers to use Renewable Energy Guarantees of Origin (REGOs) as proof of purchase for renewable power on an “annual reconciliation” basis.
From 2026, each electron used by a customer must be pinned down to an identifiable half-hour delivery period for billing purposes. Yet when it comes to matching the exact same electrons to their green generation credentials, they only need to have coexisted in the same year. A supplier can lawfully label sold energy as renewable even though it wasn’t consumed at a time when green generation was happening.
We believe this is a nonsense. The REGO system is now 21 years old. It was created when renewable energy was less than 3% of energy produced. REGOs were a very basic way of accounting for renewables in the system at a time when a small minority of customers chose (expensive) renewable tariffs. Now? Renewables have outperformed fossils in the energy mix three years running. Yet when customers choose a renewable supplier tariff, there is no connection between their consumption and actual renewable output.
Time to use the tech available
We have the technology to make that connection at a half-hourly level of granularity. Why don’t we use it?
In the meantime, businesses wanting a real link between their consumption and renewable generation can use the ENTRNCE Matcher tool. Our unique software platform gives you a Clean Energy Score based on how well your usage aligns with periods of renewable output. For more information and to find out your organisation’s Clean Energy Score, get in touch.
