Economic advisory on Ofgem’s price cap for a Big6 energy retailer

Challenge

Our client, a Big6 energy retailer, was looking for economic advisory on how it would be impacted by Ofgem’s price cap and how it should respond to its consultation.

It needed to pull together a team at short notice to provide the quantitative and qualitative analysis of the published data provided in the Ofgem data room.

​Solution

 

We deployed a team of experts at short notice and leveraged our existing capabilities and experience from the prepayment price cap.

Through our experience of working with 75% of the domestic energy market, we were able to quickly identify the shortcomings in the Ofgem assumptions and modelling.

We provided our client with robust challenge to present to Ofgem and the recommendations to follow to ensure the price cap methodology was closer aligned to how energy suppliers operate in the real world.

Results

The issues we identified were successfully challenged by our client and resulted in a multi-million pounds improvement to its position under the price cap.