Energy policy and regulation news – February 2025
Stay up to date with what’s going on in the non-domestic retail energy market and regulation, thanks to our bi-monthly newsletter.
As well as our work with businesses and the public sector, supplying energy and helping our customers towards net zero, we’re playing our part when it comes to developments in regulations and technology. The SSE Energy Solutions regulation team is working hard to represent the best interest of our partners and customers to Ofgem, the Department for Energy Security and Net Zero (DESNZ) and other regulatory bodies and industry parties.
So what’s on the horizon for metering, AI and other changes in the energy industry?
Electricity
Market-wide Half-Hourly Settlement (MHHS) update
MHHS aims to deliver one of the largest changes to the retail energy market, implementing half-hourly settlement throughout the electricity market. The settlement process balances the differences between the quantity of electricity suppliers buy and how much customers actually use. The programme has been running for several years.
Following our last update where we reported that the programme was seeking a six and a half month delay, we can now confirm that Ofgem has approved this, due to system integration testing taking longer than expected. However, Ofgem has stated that there should be no further delays in the delivery of such a vital programme, and will be taking forward several measures to expedite the delivery of MHHS. You can read their decision letter on Ofgem’s website. Click here to visit our dedicated MHHS page.
Radio Teleswitch Service (RTS) ad campaign
Following October’s Call for Action on RTS by Ofgem, the regulator has launched a new advertising campaign to encourage customers with RTS meters to upgrade. It’s faced by Lorraine Kelly, who explains what the RTS service is and how domestic and non-domestic customers can identify if they have an RTS meter. You can find out more on Ofgem’s website.
If you want to learn more about RTS, you can read our blog post. Ofgem has guidance here and EnergyUK, a Trade Association for some energy suppliers, has guidance here.
Gas
Ofgem call for input on the gas disconnections framework
Ofgem has launched a call for input on the arrangements for businesses and households to disconnect from the gas grid as they make the switch to low-carbon heating. The regulator said the current process is “complex and difficult to navigate” – an issue exacerbated by a lack of clear guidance on how it works in practice – costly, and a potential barrier to transitioning away from gas.
Ofgem is keen to hear from a range of interested parties, including consumers. The response deadline is 7 March 2025 and you can find further details on Ofgem’s website.
Dual fuel
DESNZ call for evidence on developing an energy smart data scheme
DESNZ is welcoming views on the potential for introducing a smart data scheme in the energy sector. The objective is to give customers control over the use of their energy data and help them make informed choices about their energy needs in an increasingly complex market.
Responses are due 10 March 2025, with further details at gov.uk.
Other market developments
Ofgem Consumer Confidence Programme
As part of Ofgem's Consumer Confidence Programme launched in late 2024, the regulator is developing a set of consumer outcomes and is keen to co-create these with input from suppliers and consumer groups. Ofgem held a workshop to discuss the key categories in the Consumer Interest Framework covering Quality and Standards, Resilience, Low-Cost Transition and Fair Prices. Ofgem gathered feedback on its draft outcomes, and next steps will include mapping outcomes to the existing regulatory framework to identify gaps and areas of concern, before taking a holistic approach to assessing options later this year.
You can find more details on Ofgem’s website.
AI in the energy sector: Ofgem consultation on draft guidance
Following a call for input in mid-2024, Ofgem has issued a new consultation on the drafting of its guidance for the use of artificial intelligence (AI) in the energy sector. Ofgem isn’t proposing any new regulatory requirements; however, it is consulting on best practice guidance to minimise risk and maximise opportunities that AI offers.
The deadline for submission is 7 February 2025 and you can find further details on Ofgem’s website.