All you need-to-know about the Ofgem introduced P272

P272: A Business Owners Guide

The energy market underwent a major shift when Ofgem, the UK’s energy industry regulatory body, introduced P272.

Through this regulation, affected businesses experienced significant changes in how their power usage was recorded and billed because they were obligated to move to half-hourly electricity metering.

The ultimate aim for making these changes was to build towards a fairer, more balanced and more secure supply market.

P272: The Balancing and Settlement Code

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What P272 means for clients and suppliers

P272 is part of a move towards a smart energy market. It affected many non-half hourly electricity supply customers and brought them in line with half-hourly metering, creating a more balanced environment and encouraging more efficient and equivalent industry processes.

A mandatory regulatory change, it affected over 100,000 UK businesses with electricity meters in classes 05-08. This change meant their energy usage would start being recorded every thirty minutes. Businesses affected needed to appoint a Meter Operator (MOP) and Data Collector (DC) to cover maintenance tasks and energy consumption data retrieval and submission.

This regulation was a significant shift for energy suppliers because it asked them to improve the accuracy of their billing and provide more detailed data about their business customers’ energy consumption.

What P272 means for settlements

Settlement refers to the process of concluding how much electricity was used compared with how much was bought. Through this process, a calculation can be made to determine if there was an imbalance between the electricity supply and demand.

During a settlement, the companies who supply energy to customers and the companies who generate the energy trade with one another. P272 means that energy suppliers have accurate energy consumption data for the settlement process, benefiting the business customer who they supply the energy to.

Every half an hour, updated data can be used to compare and calculate:

  • the amount of energy the supplier purchased from the generator on behalf of the business customer,
  • the amount of energy the business customer used, and
  • the price the supplier must pay to the generator to make up the difference.

Prior to P272, this trading would rely solely on the estimations provided by the supplier about the business customer’s energy consumption. However, with half-hourly metering, real data is available and there is no need to rely on estimations that may well be inaccurate.

Benefits of P272 and half hourly settlements

Changing or configuring electricity meters

Most electricity meters for customers in classes 05-08 will be Automated Meter Reading devices, otherwise known as AMR meters, in line with industry regulatory requirements.

This means that most of these meters won’t need to be physically changed to install half-hourly billing but instead will need to be configured remotely to give HH readings.

The implementation of P272 through smart business meters is usually very straightforward and easy to manage.

The risks of migrating meters

Switching a large number of business energy customers to half hour metering is a complex process for the electricity industry to undertake and the move does not come without the following risks:

  1. First, this is a considerable change in the electricity market and any change brings uncertainty.
  2. Second, the upheaval and changing of metering methods is a multi-stage process.
  3. Third, there is a possibility of risks to the security and privacy of a company’s energy usage data.

However, with this regulation first introduced in 2014 and most changes implemented by 2017, the risks have now been largely overcome.

Benefits of P272

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