Government and regulatory intervention is widespread, often driven by fundamental environmental challenges.  In this context, strategic decision-making is paramount, requiring a deep understanding of market dynamics and the associated risks and opportunities.  

Examples of these risks and opportunities include:

• European market integration
• Changing ownership models for energy infrastructure
• Pressures on financial management and operational efficiency
• The drive towards carbon-free energy

We combine our wide geographical experience with a clear understanding of market drivers and rigorous modelling to help clients understand their markets and develop strategies based on sound economics. By clearly drawing out the sources of value and risk, we support clients in their commercial and investment decision-making.

We advise regulators and companies on how best to introduce, implement and adapt to regulatory frameworks.

Our experts have been shaping global regulatory thinking for decades - from the first price control reviews on newly-privatised industries in the UK, to the introduction of new regulatory regimes all over the world.

Our advice is always given with a clear understanding of the wider context. Because we work for both regulators and regulated companies, we’re trusted to be objective by all sides – and our clients benefit.

By using our expertise in behavioural economics, we help clients find new solutions to regulatory problems. Changing outcomes in energy regulation requires a deep understanding of the economic and psychological drivers of behaviour, both by customers and market players.

Read more about our regulation work.

Designing energy market institutions can have far-reaching implications - from incentivising efficiency in production and consumption, to attracting and sustaining private investment.

When designing effective and competitive market institutions, policymakers and regulators must appreciate the incentives of various stakeholders and understand the market structures and mechanisms that will deliver them.

We have experience in all aspects of energy market design, having advised private companies, public institutions and regulators across Europe on issues ranging from:

• unbundling and restructuring requirements
• cross-border arrangements and infrastructure investments needed for gas and electricity Target Models
• design features underlying capacity mechanisms and procurement processes

We have an in-depth understanding of the legal framework of European energy markets, and decades of experience applying it.

The EU target to cut greenhouse gas emissions by 80-95% by 2050 requires radical changes to energy systems. In 2050, two thirds of our energy should come from low carbon sources. Electricity and heat production need to be almost emission-free, despite higher demand.

Only a new energy model will make our system secure, competitive and sustainable. This will involve increasing electricity generation from renewable sources, using storage technologies and flexible gas fired generation as a relatively low emission way to complement intermittent renewable generation, exploring the use of carbon capture and, in some favourably disposed countries, increasing nuclear power generation.

Greater energy efficiency will help to deliver policy goals supported by new technologies such as smart metering. New approaches to heat supply need to be identified and implemented. Demand response will also increase the options for managing less predictable network flows from renewable energy. Energy taxes, tradable emissions rights, auctions for renewable generation contracts and renewable purchase obligations have all affected energy markets.

Can markets deliver affordable, diverse, secure and environmentally-sound energy supplies? How should intervention to address environmental concerns be structured? We work with governments, regulators and companies to analyse these questions and develop solutions.

A smart and flexible energy system lies at the heart of delivering secure, affordable and clean energy. Deploying smart technologies can optimise use of existing resources and reduce costs, even as more demand is placed on energy networks.

We have international experience in:

• Smart meters, digital and network technologies
• Maximising the benefits of better customer data
• Changing tariffs and creating new products by understanding customer behaviour

Our dispute work ranges from strategic advice to providing expert reports and oral testimony. We are skilled not only in applying economics but also in articulating economic concepts clearly to lawyers, tribunal members and judges, using accessible language and avoiding jargon. Through our long experience in dispute work, we have also become skilled in assisting counsel to prepare the cross-examination of opposing expert witnesses.

We have been retained across a number of jurisdictions to provide advice on all aspects of litigation and arbitration proceedings, commercial and investment disputes, judicial reviews and regulatory appeals.

Read more about our dispute resolution work.

Climate change targets are driving ever-increasing volumes of investment in renewable energy. Integrating intermittent renewable energy sources on the grid means investment is needed in grid reinforcement, flexible generation and energy storage.

We advise regulators, networks, generators, suppliers, and investors on issues around investment in current and future generations of energy assets. Our approach is defined by economics. We blend this with innovative thinking, quantitative techniques, financial modelling, and sector expertise.

Our significant regulatory and commercial expertise, coupled with cutting-edge analytical techniques (including dispatch modelling, financial modelling, and cost of capital estimation) allows us to play a key role in conducting commercial and market due diligence of energy assets.

We also support private equity firms and other finance professionals on transactions in the gas and power networks, and both renewable and conventional power generation.

Frontier’s proprietary modelling tools are state of the art and help our clients evaluate energy policies and regulations, support arbitration and disputes, and navigate complex business decisions.

Our models are regularly employed in policy analysis, price forecasting, commercial asset valuation, dispute resolution, and evaluating the impacts of energy policies, including capacity markets and renewable support mechanisms.

Our team of expert energy market modellers and data scientists can easily adapt our models to add project-specific functionality, or develop entirely bespoke models. Our model portfolio includes:

COMET: Cross-Sector Optimisation Model for the Energy Transition

COMET provides policymakers, system planners, and investors with critical insights into the design of tomorrow’s decarbonised energy system. Covering electricity, gases (methane and hydrogen), liquids, biofuels, and emerging energy carriers, COMET evaluates the infrastructure, technologies, and supply pathways required to build an affordable, efficient, and resilient energy system across Europe through 2050 and beyond.

Learn more about COMET and how we have used it for our clients on our dedicated site

SPIRIT: Highly granular unit dispatch model

Alone or in combination with COMET, our SPIRIT model is used to analyse dispatch of individual generation and storage units with highly detailed technical properties. Using hourly energy prices as input, the model optimises operation to maximise profits. The results provide crucial insights for long-term investment and divestment decisions. Unlike off-the-shelf models, Frontier has complete access to the source code of SPIRIT, making it especially valuable for disputes where it is vital to understand what is driving every result.

HyLO: Hydrogen cost modelling

HyLO is our optimisation model for forecasting levelised costs of hydrogen (LCOH) under realistic scenarios. It accounts for demand profiles, infrastructure, renewables, and financing. Whether for constant industrial use or variable power plant needs, HyLO finds the optimal system setup – from production to transport – based on techno-economic parameters. This enables reliable cost estimates tailored to local energy profiles and hydrogen delivery requirements.

Click here to read a detailed example of our work in this sector.

Gas flow modelling

We have a long track record of modelling gas flows in the European gas market. Our modelling framework can be applied to any interconnected gas infrastructures worldwide. We frequently use our model in combination with our database of European gas infrastructure at a market area / transmission system operator (TSO) level. The model provides insight into the operation and utilisation of gas infrastructure, including potential future bottlenecks and security of supply indicators.

Customer behaviour modelling

We combine behavioural economic and data science to produce models of how customers behave. By using techniques such as Agent Based Modelling (ABM) and causal machine learning, our models help clients understand the fundamental drivers of policies and business models, rather than acting as “black boxes”. Our ABMs have been used to simulate the uptake and usage of low-carbon heating and transport solutions and can be combined with customer archetypes to understand the distributional impacts of different pathways to decarbonisation. Our econometric propensity models help utilities unpick the marketing channels which are best suited to encouraging different groups of customers to take up technologies like smart meters.

Read about the use of agent-based modelling for simulating heating system take-up

Read about our distributional model used by the UK’s Climate Change Committee

Auctions have many important applications in the energy sector, for example:

• Renewable tenders (i.e. procurement auctions) to determine the support level and allocate offshore wind sites.
• Capacity auctions to secure sufficient power plants.
• Coal phase-out auctions for early closure of coal power plants.
• Day-ahead and intraday auctions on power exchanges.
• Procurement of balancing services by transmission system to stabilise the power grid.
• Allocation of transport rights for gas infrastructure.

We leverage our sector expertise, cutting-edge auction theory, and insights from behavioural economics to generate valuable benefits for both private and public sector clients through a diverse range of services including:

• Tailor-made auction design.
• Competitor analysis.
• Valuation support.
• Modelling of bidding strategies.

Read about an example of our work in more detail here.