Regulatory Update: TCR and Market-wide Half-Hourly Settlement
Alongside wholesale price movements, a growing proportion of electricity costs is now being driven by non-commodity charges, particularly network costs. Following Ofgem’s Targeted Charging Review, a significant portion of these charges has been restructured away from usage-based (per kWh) costs into fixed daily standing charges.
In practical terms, this means that even if a business reduces its consumption, its overall bill may not fall in line with expectations. Instead, costs are increasingly linked to factors such as agreed capacity (kVA), site configuration, meter type, and distribution network banding. For multi-site portfolios, vacant properties, or businesses with fluctuating demand, this can lead to materially higher fixed costs and reduced flexibility in managing spend.
At the same time, Market-wide Half-Hourly Settlement is being rolled out across the industry. This will move the current non half hourly meters onto half-hourly settlement, meaning suppliers will settle energy based on actual consumption in 30-minute intervals rather than estimated or profiled usage. This likely will require multiple meter exchanges across your estate.
The impact of this is twofold. Firstly, it increases the importance of accurate metering and data quality, as any anomalies or inefficiencies become more visible and directly influence cost. Secondly, it introduces greater exposure to when energy is consumed, not just how much. Businesses with peak-time usage, poor load profiles, or limited visibility over their consumption patterns could see higher costs over time, whereas those who actively manage demand may benefit.
Together, these changes mean that energy procurement is no longer just about securing the lowest unit rate. Understanding site-specific characteristics, load profiles, capacity requirements, and data accuracy is becoming critical to controlling total cost.
Key takeaway: A more detailed review of an organisation’s energy estate is now essential. Customers approaching renewal, or those who have not recently assessed their portfolio, may be exposed to avoidable cost increases without realising it.
Dukefield Energy will conduct a comprehensive, no-obligation estate analysis to identify opportunities, risks and cost-saving potential across your estate.
info@dukefieldenergy.co.uk
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