Cornwall Insight’s preliminary Price Cap projection

Cornwall Insight’s preliminary Price Cap projection: Dr Craig Lowrey, Principle Consultant at Cornwall Insight stated:

“The shift to quarterly calculations & more allowance for the costs of stranding should wholesale prices fall were anticipated. The devil will be in the detail. With greater complexity comes greater risk of unintended consequences. It would have been useful to see more detailed evaluation of Price Cap levels for the new world against the old from a consumer perspective.

“However, our initial view based upon the information & draft models provided by Ofgem and given current market conditions is that the Q4 2022 and Q1 2023 caps will show an approximate 5% reduction on our current forecast, which under the existing seasonal methodology is around £2,750 per annum for Winter 2022–23. However, due to the many variables which drive our forecasts, and the potential for further updates from Ofgem on their plans, this is subject to change.

“We are continuing to work through the information provided by the regulator in respect of Summer 2023 & beyond to determine how those under the proposed new structure compare with the existing seasonal approach.”

Cornwall Insight’s preliminary Price Cap projection