P2 Consulting and Brexit Partners collaborate for post-EU advisory offering

02 April 2018 Consultancy.uk

With just under a year to go, the 2019 deadline for Brexit negotiations is looming, and without a workable deal in sight, the UK’s economy is bracing itself for the potential of a Hard Brexit resulting from no agreement being reached. In an increasingly uncertain UK market, P2 Consulting and Brexit Partners have joined forces to help British businesses prepare for life after the EU.

Brexit Partners is a specialist strategy and execution advisory organisation, pertaining exclusively to helping clients navigate an uncertain future as the UK pushes forth with its decision to leave the European Union. The organisation comprises of experts from the financial services, management consulting and public policy disciplines, as well as from academia.

With the end of Brexit negotiations now under a year away, Brexit Partners has announced a new partnership with P2 Consulting, a leading project and change management consultancy. Founded in 2013, P2 has grown significantly year-on-year, and currently generates revenues of around £11 million from its portfolio and project management services, delivered principally to clients in the financial services and consumer/retail sectors. The firm is also undergoing a period of inorganic expansion, having recently concluded a merger with consulting firm Certeco, in order to meet growing client demand, having recently been named as the second fastest growing private company in the UK in 2017, according to the Sunday Times Virgin Fast Track 100. 

P2’s alliance with Brexit Partners comes as the latest development in an extended business relationship between the two firms, which have collectively completed over 30 Brexit projects. The focus of the partnership is to help organisations understand and respond to the challenges and opportunities of a dreaded ‘Hard Brexit’, which would mean complete separation from the EU and a return to an arrangement that existed before Britain's entrance into the organisation – something which could stifle economic growth in Britain by 8%

P2 Consulting and Brexit Partners collaborate for EU Departure consultancy

With this alarming backdrop, P2 and Brexit Partners will work with clients to help them mitigate any negative impacts and where possible, help them disrupt the market, innovate and create competitive advantage. The firms intend to do this by combining Brexit Partners’ pool of experts spanning business transformation, corporate finance, legal, regulatory, risk management, public policy, marketing and human resources, with P2 Consulting specialism in project and programme management, business analysis and testing, in order to provide end-to-end Brexit impact analysis, scenario planning, Brexit strategy and strategy execution. 

Dr. Ray Nulty, Managing Partner at Brexit Partners said of the predicament faced by UK businesses, “It’s not just about internal processes and exposure to sterling – they also need to think about the impact on customers, supply chains and capital markets. Firms need to approach Brexit as a transformational change and use it as an opportunity to future proof their organisations. It’s vital they move swiftly to get a 360-degree view of the challenges and put measures in place to mitigate risks.”

Remarking on how the two firms can help clients in this regard, Julian Clarke, Group Client Officer at P2 Consulting added, “UK corporates require clarity as to the consequences of Brexit, but one thing for certain is that it signals significant change. Our combined experience will provide a guiding light to organisations still caught in Brexit confusion and help those that are further down the line in their preparations but have technical difficulties they might need help with.”

Brexit consulting

The UK’s economy as a whole remains sluggish as firms remain reluctant to invest large sums in a market which may be increasingly isolated, post-2019. However, bucking this trend, the consulting industry has continued to prosper, thanks in part to private and public sector demand relating to Brexit uncertainty.

Last year, McKinsey & Company was revealed as the consultancy to have successfully obtained a sought after government tender for the implementation of nearly 800 Brexit-related plans. The contract was aimed at further papering the cracks at Whitehall, following the extensive streamlining of the British Civil Service in recent years, while the future hiring of some 5,000 staff is still likely to further boost operations ahead of 2019’s deadline for negotiations with Brussels.

More recently, this saw the UK Government commission an analysis by Big Four professional services firm EY into the impact of Brexit on the UK medicines supply chain. The results of the investigation, which will include talks with drug manufacturers who have already revealed they are spending millions of pounds preparing for the UK leaving the EU, may however, remain secret because the information could be commercially sensitive.

As private sector clients also move to position themselves for Brexit, meanwhile, EY announced the launch of its new Geostrategic Business Group, in collaboration with Teneo Intelligence. The new wing of EY will work with or organisations and institutions on a global basis to understand the business implications of the geopolitical landscape, amid uncertainty brought on by Brexit, the Presidency of Donald Trump, and a host of inconclusive elections across Europe.

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Brexit will have major impact on UK-EU electricity flows

22 April 2019 Consultancy.uk

Brexit could have a major impact on the consumer price of electricity in the UK, according to an analysis by Sia Partners. The total costs for UK society could swell to €600 million annually due to less efficient flows of electricity.

As the Brexit process has perpetually stalled, with no realistic end in sight now until Halloween, underprepared businesses have been handed a lifeline. The scramble to prepare for a No Deal scenario can now continue for another half-a-year, and one of the key factors which companies will need to consider when drawing up these plans is the cost of accessing utilities post-Brexit. In the digital age, virtually no business can survive without a ready supply of electricity – while the pay-cheques of staff will also need to inflate to accommodate future rises in bills.

With significant cross-border flows of electricity between continental Europe and the UK, Brexit is destined to have a major impact on individuals and companies in this manner, according to new analysis by consulting firm Sia Partners. These flows of electricity are governed by common European rules, but when the UK leaves EU, Britain’s electricity markets will no longer be integrated into Europe’s ‘Internal Energy Market’.

European model

Historically, electricity grids and markets were developed on a national level. However, years ago the EU set out to achieve integration in electricity grids, on the premise that coupling grids and markets can lead to significant benefits. By making electricity flows possible, price arbitrage can be faded out by allowing buyers to access cheaper prices offered beyond the country’s own borders, driving up competition and lowering average prices.

Brexit will have major impact on UK-EU electricity flows

An analysis of electricity flows between the UK and Ireland demonstrates this. Before Ireland was coupled to the UK, commercial electricity exchanges on the UK - Ireland border flowed 40% of the time against the natural direction, i.e. from the higher to the lower price market. After more effective cooperation and regulation was put into place ('After the I-SEM' went live), the picture changed drastically, with commercial flows now following the price differential 96% of the time. Quantifying this welfare benefit is not easy: according to one estimate by ACER, the economic added value of having market coupling with implicit capacity allocation on the GB-Ireland border (1GW) amounts to around €110 million annually.

Europe’s aim is to achieve interconnection of at least 10% of their installed electricity production capacity by 2020. As it stands, seventeen countries are on track to reach that target by 2020, or have already reached it.

On the UK side, the region currently has a total capacity of around 5GW connected with mainland Europe (France, the Netherlands, Ireland, Belgium), corresponding to roughly 5% of UK’s installed capacity. In comparison with other EU countries, this ratio is on the low end; however, the UK is playing catch-up and has 10 interconnections scheduled for commissioning in the next four years.

Brexit

It's clear that the UK’s withdrawal from the EU will have an impact on electricity markets co-operation. The question which remains is how large will the impact will be? To provide a forecast for this, analysts at Sia Partners ran a modelling exercise with two scenarios in mind. After leaving the European bloc, the UK will have to make agreements with European countries, similar to how Switzerland and Norway currently operate. Norway has a deal with a relatively high level of integration with the EU’s internal energy market, while Switzerland stands at the other end of the spectrum, with the country excluded from several market coupling initiatives (e.g. MRC, XBID) and from implicit capacity allocation with any other EU member state.

“If Brexit leads to a construction which is similar to the Swiss deal, where UK’s electricity borders are uncoupled from its neighbouring countries, then there will be a major loss of welfare.”
– Sia Partners

If the UK follows in the footsteps of Norway, then the consequences of Brexit could be muted. According to Sia Partners’ calculations, the economic loss would be minimised in the mid-term, with only operational challenges expected. For example, the implementation of pan-European projects, such as XBID, could run into delays in the UK. The EU currently has 7 of such interconnection projects scheduled for completion before 2022.

“In case a Norwegian style deal is struck, the UK will lose its decision power related to EU energy policy but it would allow keeping the benefits linked to the internal energy market not only for itself but also for Ireland and continental Europe,” the researchers state.

If, however, a Swiss deal is struck, then the projected costs could range between €500 million to €1 billion. An expected 60% of this loss will be borne by the UK, 16% by France, and 8% by Belgium, the isle of Ireland and the Netherlands. The researchers concluded that if Brexit leads to a construction which is similar to the Swiss deal, where UK’s electricity borders are uncoupled from its neighbouring countries, “then there will be a major loss of welfare.”