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- Mandatory half-hour meter readings delayed until September 2025
Electricity bills will remain high for longer as regulator Ofgem delays smart meter reforms that could save households more than £200m a year.
The changes would mean energy companies would have to tally bills every half hour for all homes with smart meters. Currently this is optional.
Ofgem expects the move to save households up to £4.5bn by 2045, or around £214m a year on average.
However, the regulator has delayed the process for the fourth time, six and a half months, to allow for more testing.
The delay will see the mandatory ‘market-wide half-hourly settlement’ (MHHS) program begin at the end of September 2025, rather than the original date of early March next year, although not all energy companies will pass to the new system at the same time.
In an energy context, “agree” means that an energy company calculates how much energy a customer has used versus the amount it costs, not the more common meaning of paying a bill in full.
Don’t count on it: long-awaited changes to energy bills are further delayed
The goal of the MHHS is to equalize the prices that energy companies and consumers pay for electricity.
Currently, the price that energy companies pay for electricity from suppliers changes every half hour.
But that rapid change isn’t always passed on to consumers, as many energy companies apply bill updates less frequently. However, some energy tariffs already use half-hour settlement.
Most households pay energy bills capped by Ofgem’s price cap, currently £1,717 a year for average energy use. The maximum price will increase by 1.2 percent to £1,738 on January 1, 2025.
It means the typical household will pay an extra £21 a year for energy, until the price cap is reset again in April 2025.
A statement from Ofgem said: ‘Ofgem is extremely disappointed that such a significant delay has turned out to be necessary.
‘MHHS remains a high priority for Ofgem and the Government as a means of enabling the decarbonisation of the energy sector at the lowest cost.
“MHHS participants must comply with the revised MHHS implementation schedule and ensure the earliest possible delivery of MHHS-related benefits to consumers.”
Ofgem said there will be no further delays to the reforms.
How will the half-hour agreement save me money?
The main savings will come from households and businesses adopting different tariffs, Ofgem hopes, including “time-of-use” energy agreements.
These are rates in which the price paid for energy varies, with cheaper rates during off-peak periods, usually at night. An example is an Economy 7 fare.
They are rare compared to standard energy agreements, where the price paid does not vary depending on the season.
Additional savings could come from energy companies becoming more efficient as a result of the half-hour agreement.
For example, once homes have smart meters, energy companies will be able to more accurately predict electricity demand at certain times.
That means they can “balance the grid” more efficiently by turning power plants on and off to meet this demand.