Ofgem to amend half-hourly ‘Group Correction Factors’ from 5 May 2026

What’s Ofgem decided?

Ofgem agreed with the Drax Energy Solutions proposal that these scaling factors should be reverted to their previous values. However, it disagreed that they should be applied retrospectively. Therefore the regulator approved the alternative modification. This will revert the scaling factors back to the pre-September 2025 methodology from 5 May 2026.

The original proposal would’ve backdated the pre-September 2025 methodology through 2025 and 2026.

The alternative – and Ofgem’s chosen approach – means that non-migrated half-hourly (HH) settled customers will see higher charges for the period September 2025 to May 2026.

What are these charges?

The charges – which cover the cost of unallocated electricity between Grid Supply Points (GSPs) and customers’ meters – are known as Group Correction Factors (GCFs). Alongside energy losses, they account for the difference between energy input into the system and metered energy consumption.

After initially falling with increasing deployment of small-scale, behind-the-meter solar spilling power onto the system in the 2010s, GCFs have been increasing. A GCF value below 100% indicates a surplus of energy and therefore the GCF acts to reduce settled consumption. A value above 100% indicates the reverse, and therefore represents an added cost to suppliers and consumers.

GCFs typically follow a seasonal and daily profile and are usually (but not always) higher outside the midday solar peak and during the winter. As the graph below shows, GCFs have typically reduced over the midday solar peak but increased during the evening demand peak period.

How have GCFs changed with Market-wide Half-Hourly Settlement?

Prior to milestone 10 (M10) of Market-wide Half-Hourly Settlement (MHHS), which went live on 22 September 2025, Elexon mainly applied GCFs to non-half-hourly (NHH) settled consumption.

Post-M10, Elexon also applies GCFs to all HH meters. The new GCFs for customers migrated to MHHS vary depending on the connection voltage and the new Consumption Component Classes’ (CCCs’) errors in estimation. Legacy CCCs, associated with metering systems not yet migrated, had scaling weights which Elexon applied as average values for the most similar MHHS-updated CCCs. Post-M10, GSP group correction scaling weights have increased costs for non-migrated HH customers, increasing their GCFs.

The changes have particularly affected precisely metered Extra High Voltage (EHV) customers. These users were facing charges for energy that they hadn’t consumed, and charges to which they hadn’t previously been exposed.

What does the Modification P507 do?

We (Drax Energy Solutions) raised the Modification P507 Reverting the legacy Half Hourly scaling factors in Market Domain Data to the pre-M10 values on 9 December 2025. Our Modification proposed to reinstate the pre-M10 GSP GCFs for all non-migrated, Half Hourly (HH) customer metering systems in measurement classes ‘C’ to ‘G’and apply this retrospectively from 22 September 2025 (M10).

Elexon conducted analysis, assessing the impact of P507 on Measurement Class ‘C’ customers – including EHV customers – in November 2025. It restricted analysis to a month of data given the timetable for the urgent modification process, and considered actual and estimated consumption. At M10, the scaling factors for measurement class C changed from zero to 0.55 (for actuals) and 0.95 (for estimates). Overall, this increased consumption for measurement class C by 0.22%, equating to a net total of 21,087 MWh. At an average imbalance price of £75/MWh, that meant a total net cost of about £1.6m for all Measurement Class C customers.

Is there anything else I should know about GCFs?

Ultimately, the approved solution is a temporary measure. The industry expects the development of an enduring solution through Elexon’s Balancing and Settlement Code (BSC) issues group: Issue 120 Review of the approach to GSP Scaling Factors post M8/10. BSC Issue 119 Understanding and assurance of increasing electricity losses (LLF and GCF) also seeks to review the inter-relationship between losses and GCFs.

You can find more information about these issues on the Elexon website.

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