Helping British Consumers Save Millions on Energy in a Reformed Market
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June 04, 2024
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Octopus Energy, an active participant in the UK Government’s Review of Electricity Market Arrangements (“REMA”), asked FTI Consulting to assess how large energy-intensive consumers could, under a locational pricing design, save on electricity bills by siting in areas with lower wholesale electricity costs.
Our Impact
- FTI Consulting revealed that all British consumers could save around £500 million to £900 million between 2030 and 2040 on wholesale electricity costs and more renewable generation could be consumed rather than curtailed (approximately 17TWh), thereby reducing carbon emissions.
- Our experts estimated that large industrial plants could save 65% (up to 99% for flexible consumption) by siting their operations in the North of Scotland rather than in the South of Great Britain (“GB”) to benefit from locational electricity pricing.
- FTI Consulting’s work added to a previous assessment of the merits of locational wholesale electricity pricing in GB for the Office of Gas and Electricity Markets (“Ofgem”) and enabled Octopus Energy to participate in the ongoing policy debate on electricity market arrangements in GB.
Our Role
- FTI Consulting’s Energy team deployed its in-house fundamental power market modelling tool to forecast hourly wholesale electricity prices in GB under a national and zonal design from 2030 to 2040.
- The team assessed the impact of locational pricing and siting choices of consumers on the need for transmission investment.
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June 04, 2024
Key Contacts
Senior Managing Director
Managing Director
Senior Director
Director