Measuring the impact of our policy decisions

We use different methodologies to help understand the effects of proposed policy changes. This includes: 

• people who use energy
• energy industry
• society and environment

The assessments are part of the policy-making process. They help with the decision-making process but are not the final decision.

We use different methodologies as part of an impact assessment. This depends on the policy changes being made.

Impact assessments

An impact assessment is done when an important change is proposed. Examples of important changes include changes that affect:

• legal powers, such as licence conditions
• costs for the energy sector
• security of energy supply
• environment

Distributional analysis

A distributional analysis is used to assess how changes to policies can affect people living in a household, including those who may need extra support or businesses. We do this by grouping different energy consumers into smaller groups based on different characteristics. These groups are called ‘archetypes’.

The groups are based on different characteristics, examples include people’s:

• incomes
• age
• health condition
• energy use

This methodology helps us to understand the different experiences and needs of different energy consumers. By understanding these in more detail we can make decisions that will help these groups of people.

We have used this methodology to help make changes to polices and decisions. Examples of policies which have used this methodology include network charges, prepayment meters, and energy price cap.