Digital Economy

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As markets become increasingly digitalised, new regulatory, competition and policy challenges will inevitably arise. Bringing together experts from across energy, water, transport and infrastructure, CEPA’s consultants are well positioned to think about what these changes may mean for our clients, for policy makers and for consumers.

Some of our thoughts on these issues and summaries of support we have provided to our clients in this area include:

Questions we have thought about

  • What impact might digitalisation of markets have on price discrimination and dynamic pricing? And what might be the distributional effects on consumers?
  • How should regulators respond to cybersecurity risks in the design of regulatory price controls?
  • How might the adoption of electric vehicles be incentivised most cost-effectively?
  • How can the influx of new data be used to improves estimates of consumer price elasticity?
  • Can regulators make use of data to improve their understanding of customer segmentation and behaviour?

CEPA blogs

CEPA reports

  • Distributional impacts of time of use tariffs
  •  Use of large datasets to identify demand elasticities for public transport in Sydney (for IPART Australia). The introduction of Opal card in Sydney and the surrounding areas has subsequently made available a large dataset of high frequency tap-on tap-off public transport passenger data, which potentially enables the calculation of demand elasticities that are more precise and accurate than has previously been the case. Consequently, CEPA in collaboration with the Hensher Group are supporting IPART by conducting a demand elasticity study for public transport in Sydney and the surrounding areas, which will be used as an input into the next review of fares.
  • Advice on an appropriate approach to residential customer segmentation for the England and Wales water and wastewater sector. We were commissioned to build an evidence base for customer segmentation in the water industry. We also identified possible data sources to inform a segmentation approach which could allow Ofwat to:
- gain a better understanding of the wants and needs of water customers.
- provide a common language across Ofwat relating to customer segments.
- better challenge the sector in making sure eligible customers are receiving financial and non-financial help.
- better challenge the sector in reducing bad debt.
- inform its assessment of business plans’ in the areas of affordability, vulnerability, customer service and engagement content.

Our Clients