As readers know, I am fond of dissecting the components of a domestic electricity bill, or at least, I intermittently drag myself into doing it out of a sense of duty. I set out to do a six-monthly update of this on Friday evening [11th September], but was immediately distracted by something else in the data. The butterfly that caught my eye was:

Typical Domestic Consumption Value

[Skip the numbery part below, if you like. I would, if I could.]

The TDCV is the amount of electricity and gas used by the “typical” household, and is used by Ofgem to set the value of the default tariff cap. It has recently been reduced, as follows:

PeriodGas TDCVElectricity TDCV
Prior to October 202312 MWh2.9 MWh
October 2023 to June 202611.5 MWh2.7 MWh
July 2026 onwards9.5 MWh2.5 MWh

However, you’ll be pleased to know that things aren’t quite that simple. Ofgem’s latest (1.11) Annex 9 sheet gives calculations based on different figures and dates for benchmark use. Note that benchmark use has been different to the TDCV. However, from July 2026, the two have been aligned. These are the dates and benchmarks used in that spreadsheet to (currently) calculate (historical) price caps:

PeriodGas benchmark useElectricity benchmark use
April 2018 to December 202512 MWh3.1 MWh
January 2026 to June 202611.5 MWh2.7 MWh
July 2026 onwards9.5 MWh2.5 MWh

It means that, although I once earnestly reported that the price cap from January to March 2025, as reported by Ofgem, was £1738, that figure can no longer be found in the present spreadsheets (that I can see). Instead, you can have £1561 or £1869 (or £1862 on a different spreadsheet) for those dates. Ignoring the parenthetical value, the first is based on the present TDCV (i.e. calculated using the present benchmark = TDCV usage), and the second is based on the benchmark use shown in the table above (i.e. it is as calculated “at the time,” although clearly not as the numbers don’t match to the present spreadsheet). Don’t worry if you’re not confused yet. Or don’t be confused if you’re not worried yet. Or something.

The effect of reducing the TDCV (or benchmark, if that differs) over time

Naturally, when you calculate the energy price cap, if you reduce the benchmark amount of energy people are using, the value of the price cap comes down. Nothing nefarious has gone on here, although when Ofgem says the spreadsheets are “not fully accessible,” several choice rejoinders spring to mind. The important point is that households are using less energy than they were. A supplementary point is that old default tariffs, price caps, are no longer easily comparable to the current one, and that it would be easy for a slippery politician to claim a reduction in cost, when what has really gone on is a reduction in use. (I’m not saying this has happened. I haven’t looked.)

The two figures on Ofgem’s main sheet represent i) what the old price cap would have been, if it had been calculated using today’s TDCV – no difficulty in understanding this (e.g., £1561), and ii) old price caps that might have been, and probably never were, based on benchmarks that didn’t match the TDCV when the calculation was made (e.g., £1869). These two figures are shown in Ofgem’s current sheet, when the “announced” figure at the time was £1738. The first is the “fair comparison.” The other goes down in recent quarters, based on the reduced benchmark use in the second table above. Beginning at the period April to June 2024, when M. Miliband made his “promise” to cut bills by £300, the next table shows how different versions of the price caps have evolved. Three values are shown: as reported today, had the present TDCV / benchmark been in position back then; as reported today for the historical benchmark; and as announced in the contemporary Ofgem letter.

PeriodPrice cap, £, as it would have been if today’s TDCV / benchmark was in placeAs it would have been under then-existing benchmarkAs announced in the letter
April 2024 – June 2024152018181690
July 2024 – September 2024141416851568
Oct 2024 – Dec 2024154318461717
Jan 2025 – Mar 2025156118691738
Apr 2025 – June 2025165519921849
Jul 2025 – Sept 2025154118541720
Oct 2025 – Dec 2025157618911755
Jan 2026 – Mar 2026158417581758
Apr 2026 – June 2026147716411641
Jul 2026 – Sept 2026166316631663
Oct 2026 – Dec 2026172317231723

So, only the two most recent price caps are the same on all measures, after Ofgem decided to use the TDCV to set the benchmark use. From January to June 2026, “as announced” matches “as it would have been under then-existing benchmark,” and before that, nothing matches (the benchmarks used for electricity seem to be 2500 kWh, 3100 kWh and 2700 kWh, reading across left to right) (ish).

At a constant present TDCV, the price cap has gone up £203 since the advent of Milibandism. Under “then-current benchmark,” it has gone down £95, and under “as announced,” it has gone up £33. The most recent price cap includes a temporary removal of VAT on electricity, and the movement of some components off bills and onto general taxation.

[Unreadable number-crunching ends. Begin reading now, if you like.]

Why has TDCV fallen?

On the face of it, gas usage in the typical household has gone down 20% over three years, and electricity has gone down 14-20% depending on which benchmark you use. There are a range of potential explanations for this, and I’m sure that some would love it if the decrease could be laid at the door of improved insulation. Helpfully the original Ofgem TDCV consultation document of March 2026 discusses the consumption drivers. Their estimate of the change in energy use goes back 20 years:

This [the present decrease in use] is the continuation of a trend that in total since 2005 has seen total domestic electricity consumption fall by about 18% and gas by about 32%.

The potential drivers are:

  1. Long-term energy efficiency increases
  2. Warmer seasonal temperatures
  3. Micro-generation (rooftop solar, etc)
  4. Reduced use in response to increased cost

Ofgem are not willing to tiptoe around the tulips, so well done to them:

While factors such as energy efficiency improvements and climatic trends may continue to influence the longer term reduction in consumption, the scale and persistence of the recent decline in consumption is most consistent with a change in consumption behaviour.

…

Throughout the wholesale price crisis, consumers significantly reduced demand in response to affordability pressures, due to both high energy bills and wider cost of living pressures.

The reduction in use may have been stimulated by the astronomical price hikes of a few years ago, but it has not gone away since (probably because the price may have settled, but it has not returned to pre-2022 levels).

It seems to me that you can measure wealth in terms of energy use as well as actual cash. Remembering Jevons’ Paradox, an increase in efficiency alone might be expected to result in increased energy use. Instead, we citizens of the UK are not doing things we would otherwise have done, and are therefore poorer. That is the bitter fruit of Net Zero. Remember, They do not want you to use more energy. Therefore, should there be efficiency gains, They will impose greater costs, in order to deter use, to sidestep Jevons, and “save the planet.”

/tinfoil hattery

Old episodes in this series:

Energy price cap watch (December 2024)

Nervous breakdown of an electricity bill (April 2025)

Breakdown of a leccy bill 2026 (March 2026)

All Ofgem’s Energy Price Caps are available here.

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12 Comments

  1. Many thanks, Jit.

    I hadn’t noticed the reduction in TDCV, and wouldn’t have done so had you not drawn it to our attention. It makes a big difference to the number-crunching.

    I wonder how many politicians and journalists are aware of it? Very few, I suspect.

    Liked by 2 people

  2. Typo alert, Jit. Those energy quantities in your tables are in thousands of kWh (lower case ‘k’). (Or ‘k’ kWh, or MWh) 😀

    Liked by 1 person

  3. There’s a massive hole in Ofgem’s logic & actions in reducing electricity TDCVs.

    We’re repeatedly told how successful the campaigns to switch consumers from ICE vehicles to EVs and gas-boilers to heat pumps.

    EVs & HPs are both the greatest electricity-consuming appliances that nearly any electricity consumer will ever own. Many will own both. Consequently, households with one or both, will see their annual electricity consumption increase significantly.

    Grok was asked:
    “Britain’s household annual electricity consumption – by approx how much (as % and in kWh) would it increase if a home added an EV; and, if a home added a heat pump?”

    Grok responded:
    “Typical British household electricity use (gas-heated home, no EV) is around 2,500–3,300 kWh per year. Ofgem’s current “medium” benchmark for price-cap calculations is 2,500 kWh; government mean figures sit higher at roughly 3,200–3,450 kWh because a minority of high-use homes pull the average up. Median use is closer to 2,500 kWh.

    Adding an EVA typical UK car does about 7,000–8,000 miles a year. Real-world EV efficiency is commonly 3.5–4.5 miles per kWh, and home charging incurs 10–15% losses.Extra electricity: roughly 2,000–3,000 kWh per year (most sources cluster around 2,500 kWh for a typical BEV charged mainly at home). A commonly cited round figure is ~3,000 kWh.

    On a 2,700 kWh baseline that is an increase of about 75–110% (often described as “almost doubling” electricity use). On the higher mean of ~3,300 kWh it is still a 60–90% rise.Adding a heat pumpA typical 2–3 bedroom home needs around 10,000–12,000 kWh of heat per year. With a seasonal COP of ~3.0–3.5, the heat pump itself uses 3,000–5,000 kWh of electricity.Field data and analyses commonly give ~4,000 kWh extra for a family-sized system (Energy Saving Trust trials ~4,100 kWh for a 3-bed; other studies show measured increases of 2,550–3,080 kWh depending on the sample).

    On a 2,700 kWh baseline that is an increase of about 110–185% (often +130–150%). On ~3,300 kWh it is still a 90–150% rise.CombinedAn EV plus a heat pump can easily add 6,000–7,000 kWh, taking a typical home from ~2,700 kWh to 8,500–10,000+ kWh — a tripling or more of electricity consumption. Actual numbers vary a lot with mileage, house size/insulation, heat-pump performance, and how much charging or heating happens off-peak or from solar.”

    https://x.com/i/grok/share/0382c202fe154db2b2fa192e5a7790c7

    Liked by 2 people

  4. Thank you for the typo alert Joe. Worrying that it didn’t feel wrong, at any point along typing “KWh” 9 times. Stop to think about it, and it’s obvious.

    Regarding the rise in EVs and heat pumps, presumably the inroads (such as they are) that these have already made mean that the median use has gone down further than the Ofgem numbers indicate. Although given 10 s to think about it, if only those above median use have added EVs or heat pumps, it wouldn’t affect the position of the median, only the mean.

    Liked by 1 person

  5. In today’s Telegraph, it is written:

    Since [Labour] has come to power, the energy price cap has climbed by £155, from £1,568 to £1,723, driven by soaring oil and gas prices in the wake of the Iran war.

    [No link: as read on Pressreader.]

    Note here that the two numbers relate to different benchmark energy use levels (inspect the data in the table above). They are “as announced in the letter.” This benchmark usage only aligns with the current price cap since July 2026.

    Liked by 1 person

  6. Every thing is getting out of hand, I have (like us all I suspect) allways sought to minimize energy use as a matter of common sense both at home and with vehicle use.

    The rise in diesel has just this week forced me to consider vehicle choice for a trip to Snowdonia next month with my daughter.

    I needed some space and load carrying capability for the trip and would ordinarily gone in my old Discovery but I realized that the trip up from Kent will now cost me as much or more in fuel than the cost of three nights self catering in a stone cottge near Bedgellert.

    So I am now considering my Toyota Aygo which runs on air (almost) 65mpg I estimate or my daughters Vauxhall Adam, neither of which really have room for the clobber, Oh well, first world problems.

    Has anyone else noticed that outside of the rush hr the roads are noticably quieter?

    All the best

    LL

    Liked by 1 person

  7. lordelate,

    I drove to York from west Cumbria yesterday, and the dreaded A66 between Penrith and Scotch Corner was pleasantly straightforward, as was the A1 heading south.

    The traffic in York was a nightmare, but then it always is. Perhaps it was worse than might otherwise have been the case because it’s university freshers’ week.

    I am dreading facing the A66 home later today. But if I have a straightforward journey home then perhaps it might suggest that you are correct about there being less traffic on the roads.

    There seems to be little doubt that we are here to serve the system, rather than the other way around. The grid is struggling to supply us with the electricity we need when we want it, hence we have to be induced to use it at times that are inconvenient to us. The price of petrol and diesel is due to short-term supply problems combined with absurdly high fuel duties and VAT, plus to some extent the UK’s inability to refine all the fuel we use. Again, we the taxpayers/consumers/voters are bottom of the pile.

    Liked by 1 person

  8. Hi Jit, the table now shows units as “kWh”, but the numbers should be “thousands of kWh”. 😀

    Liked by 1 person

  10. Your table of figures must have taken a lot of time to calculate. Most particularly the first column “Price cap, £, as it would have been if today’s TDCV / benchmark was in place“.

    However, it does not show the full impact of the adjustments. As you stated in March

    Policy Cost changes

    Renewables Obligation is the “legacy” top up to renewable generators, lately replaced by Contracts for Difference (CfD). A year ago, RO cost the typical bill payer £89 plus VAT. It is now £22 plus VAT. That alone is a saving of £67, but we may tremulously note, the typical taxpayer is now having to pay that £67 by other means.

    ECO was about £24 a year ago, and is now deleted. So that’s a genuine saving off the leccy bill of, um, £24.

    Other things have gone the other way. The Chancellor likes to trumpet about another £150 off some bills, the “Warm Homes Discount”, WHD. This is a subsidy for “the poor.” On the leccy side, it was £11 +VAT a year ago, and is now £17. That’s an inflation rate of 50%, in case you were wondering. And I must note the shiny new nRAB – nuclear Regulated Asset Base – adding another £13 to the bill.

    That makes about a £61 reduction. Or ~£56 with the new TDCV. Then there is the removal of VAT on electricity bills. Without these adjustments, the latest price cap would be around £1820, or about 20% higher than in April 2024 – June 2024. Yet OFGEM figures suggest only a 2% increase.

    Liked by 2 people

  11. Kevin, it wasn’t too bad as the first two columns are available in the spreadsheets. For the third, I had to go to the original letters, which are helpfully archived by Ofgem.

    There are rumours of more help to come for those who cannot afford to pay their bills, presumably funded by the diminishing band who can.

    Liked by 1 person

  12. “Energy bills in Great Britain forecast to jump by £276 a year from January

    Cap poised to rise by 16% to equivalent of £1,999 for dual-fuel bill, the biggest quarterly increase since January 2023″

    https://www.theguardian.com/money/2026/sep/30/energy-bills-great-britain-forecast-to-rise-iran-war

    Household energy bills in Great Britain are predicted to soar by £276 a year for the typical household from January as the impact of the Middle East war continues through the coldest months of winter.

    The government’s cap on energy prices is poised to jump by 16% to the equivalent of £1,999 for the average annual dual-fuel bill in a further blow to struggling households, according to figures from the leading forecaster Cornwall Insight.

    The increase for the January to March period is well above the consultancy’s previous prediction of a 9% rise, with analysts blaming the uptick on the recent rise in gas market prices to three-year highs.

    It would be the biggest quarterly jump since January 2023, when the energy crisis that followed the full-scale invasion of Ukraine a year earlier was at its height…..

    …The gloomier outlook for energy bills was published as millions of households brace for energy charges to rise by 4% from Thursday as the quarterly energy bill cap, which is set by the regulator for Great Britain, Ofgem, climbs to its highest level in three years this winter.

    The unit cost of electricity will rise from 26.11p a kilowatt hour to 26.32p, while gas charges will rise from 7.33p to 7.97p – equivalent to £1,723 a year for a typical home’s gas and electricity use. However, actual household bills will depend on how much each consumes….

    Liked by 1 person

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