Communicate results Sample Clauses

Communicate results both via a final report to be delivered to BEIS and a model training session. Potentially also via further activities to disseminate findings 3.1 Part 1. Identify risks associated with the auction design for AR4 To identify potential gaming risks, internal inconsistencies, and risks of unintended consequences within the potential auction design for AR4 considered by BEIS, we would take the following steps: Step 1. Map out the incentives of potential bidders Step 2. Develop top-down analysis of the proposed auction design for AR4 Step 3. Formulate potential bid strategies Step 4. Identify specific gaming opportunities and risks 3.2 Part 2. Assess the impact of potential risks To assess the likelihood of risks materialising, and their potential impact should they materialise – on auction outcomes and consumer value for money – we would take the following steps: Step 1. Implement proposed auction design for AR4 in a simulation model Step 2. Implement identified bid strategies in the model Step 3. Populate the model with reasonable assumptions Step 4. Run Monte Carlo analysis to assess the range of potential auction outcomes While it is useful to consider the outcome of a single model run for illustrative purposes, it will be more relevant for the final analysis to understand how auction outcomes might realise “on average”, i.e., across many model runs, where the inputs are allowed to vary within pre-specified distribu- tions. For a sufficiently high number of model runs (e.g. 1001), we can draw robustconclusions 1 Regarding the sample size for the Monte Carlo analysis, it is important to have a sample which is large enough to allow the analysis to cover a sufficient amount of variability in terms of potential outcomes, i.e., to offer sufficient confidence for the regarding the most likely outcomes and the potential spread (captured by the median, lower and upper bounds of numerical output values, such as £/MWh). We will require input from BEIS to populate the model with reasonable assumptions regarding the distributions of various variables. Step 5. Assess the extent of potential risks for different auction specifications 3.3 Part 3. Consider practical measures to mitigate risks Having identified and measured risks in Parts 1 and 2, we would assist BEIS in considering practical measures to mitigate important risks. We understand that major overhauls of the auction format are unlikely given that AR4 is scheduled to open in late 2021. However, there may still b...