Ofwat Case Study

Ofwat commissioned Gemserv to provide an understanding of the key learning points from the development of central market arrangements in Scotland as part of work to develop arrangements for the market in England and Wales.

Providing industry insight and sharing knowledge.

 

Client: Office for Water Regulation (Ofwat)

Title: Review of introducing central market arrangements in the Scottish water Industry

Our Service: Consultancy

The challenge

Ofwat commissioned Gemserv to provide an understanding of the key learning points from the development of central market arrangements in Scotland as part of work to develop arrangements for the market in England and Wales.

Gemserv had assisted with the design and operation of the world’s first truly competitive retail water market in Scotland which opened in April 2008.

Gemserv developed the market design solution in collaboration with the Water Industry Commission for Scotland and key stakeholders. We designed, built, tested, implemented and operated the central registration and settlement system required to underpin the new market arrangements.

Our approach

Gemserv delivered a detailed report that set out the process under which the market arrangements in Scotland were delivered. It also highlighted potential mechanisms to manage risks and issues arising from market development.

We provided an expert view of the key learning points to be addressed to inform the critical path for setting up arrangements for England and Wales. These learning points included:

Traps and pitfalls from the experience of facilitating retail operations with the wholesale trading arrangements in Scotland
Identifying differences between the arrangements in Scotland and the potential market in England and Wales, for example the separation of water and sewerage provisions and the additional market requirements for trade effluent data.

Outcome

Following the assignment, an additional paper was published (“Lessons Learned from Opening Markets”). This summarised the essential features for the successful implementation of competitive market arrangements and included a list of the Top 10 principles.

 

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