Insights
Read our analysis of topical issues that affect our clients from our articles, blogs, and responses to public consultations.
Murky waters: Dealing with estimation uncertainty in the new water regime
In its PR24 redeterminations, the CMA “aimed up” due to concerns about misestimation in the cost of capital. But focusing on uncertainty in cost of capital estimation alone risks missing the broader picture. Read more
Adapting the RAB model for asset stranding risk
Initial thoughts on how the RAB model could be adapted to mitigate asset stranding risk facing investors in UK gas networks arising from the transition to Net Zero. Read more
Staying Afloat: To what extent is high leverage to blame for the water sector’s financial resilience issues?
Excessive financial risk-taking through elevated levels of gearing is often cited as a regulatory failure in the water sector that has led to the near collapse of Thames and the categorisation of ten firms as ‘Elevated Concern’ or ‘Action Required’ for financial resilience by Ofwat. Read more
A response to Ofgem’s consultation on frameworks for future systems and network regulation
We repost our response to Ofgem’s consultation on frameworks for future systems and network regulation. This response considers how changes to the regulatory framework might affect the financial environment for energy companies, their financing decisions, and the expected returns required to compensate their investors for changes to their level of risk. Read more
Trumping the US card giants: can Britcoin improve competition in retail payments?
The BoE's digital pound consultation signals a move by the BoE into retail payment systems that could put it head to head with Visa and Mastercard. Kairos Economics has responded to the consultation, highlighting the potential benefits of a digital pound for competition in payments and some key challenges for the BoE to work through, if it is to realise these benefits. Read more
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