Skip to content
House
Go to: press and media

Mixed outlook for energy bills as new cap announcement looms

The predictions for the Default Tariff Cap in this piece are out of date please click HERE to find our most up to date forecasts.

Cornwall Insight has unveiled its latest forecasts for the Default Tariff Cap (price cap) covering the period October 2023 (Q423) to September 2024 (Q324). The predictions, calculated from Ofgem’s updated Typical Domestic Consumption Values1 (TDCV), indicate relatively small fluctuations throughout the year compared to the same period last year. The cap is expected to remain significantly above pre-pandemic levels for the foreseeable future.

As of October 2023, the price cap for a typical dual fuel, direct debit consumer is forecast to reduce to quarter-on-quarter to £1,860. Following this initial dip, the cap is projected to rise to around £1,960 in January, before experiencing small decreases in March and July2.

Figure 1: Cornwall Insight’s Default Tariff Cap forecasts using new Typical Domestic Consumption Values (dual fuel, direct debit customer)

QUARTERLY New TDCV Q4 2023 Forecast Q1 2024 Forecast Q2 2024 Forecast Q3 2024 Forecast
Electricity 2,700 kWh £944.50 £976.63 £959.55 £929.18
Gas 11,500 kWh £916.16 £982.18 £957.19 £941.25
TOTAL £1,860.66**** £1,958.81**** £1,916.74**** £1,870.43****

Source: Cornwall Insight, calculated from market close figures 24/07/2023

Figure 2: Cornwall Insight’s Default Tariff cap forecasts using new Typical Domestic Consumption Values: Standing charge and unit rate (dual fuel, direct debit customer)

Electricity Q423 Forecast Q124 Forecast Q224 Forecast Q324 Forecast
Standing Charge (£/day) 0.50__ 0.50__ 0.57__ 0.57__
Per Unit Costs (p/kWh) 28.27__ 29.46__ 27.83__ 26.70__
Gas Q423 Forecast Q124 Forecast Q224 Forecast Q324 Forecast
Standing Charge (£/day) 0.29__ 0.29__ 0.29__ 0.29__
Per Unit Costs (p/kWh) 7.06__ 7.63__ 7.39__ 7.25__

Source: Cornwall Insight, calculated from market close figures 24/07/2023

NoteAll figures are national average unless otherwise stated. All intermediate and final calculations are rounded to two decimal places. Totals may not add due to rounding.

Dr Craig Lowrey, Principal Consultant at Cornwall Insight said:

The news of a relative stabilising of energy bills will no doubt leave households with mixed feelings. After the surge in bills seen last winter, it may bring a sense of relief to people that energy prices are currently not forecast to surge unexpectedly. However, there will also be disappointment with prices still well above the levels seen a few years ago – leaving many longing for more affordable options.

The wholesale market remains the main driver of bills, and unfortunately there is no immediate prospect of prices there returning to historic averages. Therefore, it becomes imperative the government and other stakeholders explore alternative measures to cater to consumers. This includes options to provide targeted support to the most vulnerable while promoting flexible energy solutions that encourage efficient energy usage.

Moreover, we must remain committed to funding the transition to renewable energy sources and maintaining our net-zero targets. By doing so, we can establish a stable and secure energy supply that is less susceptible to fluctuations in the international market.”

  • Ends

Notes to Editors

  1. Following a consultation process, Ofgem has revised the TDCVs, from October it will be reducing them from 2,900 kWh per annum for electricity to 2,700 kWh, and from 12,000 kWh per annum for gas to 11,500 kWh – these new numbers are now reflected in our forecast assumptions.
  2. The forecast figures for a typical dual fuel, direct debit consumer cannot be directly compared to the current level of £2,074, this is due to Ofgem’s revision of the TDCVs from October. If the current TDCVs were kept unchanged, the figures would be as follows:

Figure 3: Cornwall Insight’s Default Tariff Cap forecasts using old Typical Domestic Consumption Values (dual fuel, direct debit customer)

QUARTERLY Old TDCV Q4 2023 CI Forecast Q1 2024 CI Forecast Q2 2024 CI Forecast Q3 2024 CI Forecast
Electricity 2,900 kWh £1,013.17 £1,045.71 £1,027.59 £994.04
Gas 12,000 kWh £952.65 £1,020.74 £996.04 £978.02
TOTAL £1,965.82 £2,066.45 £2,023.63 £1,972.06

Source: Cornwall Insight, calculated from market close figures 24/07/2023

For more information, please contact: Verity Sinclair at v.sinclair@cornwall-insight.com

To link to our website, please use: https://www.cornwall-insight.com/

About the Cornwall Insight Group

Cornwall Insight is the pre-eminent provider of research, analysis, consulting and training to businesses and stakeholders engaged in the Australian, Great British, and Irish energy markets.

Want to keep up to date with Cornwall Insight’s price cap predictions? We have launched a dedicated webpage that will be regularly updated with our released predictions. This page also offers helpful answers to frequently asked questions about the price cap. Don’t miss out on this valuable resource – check out the page today: Predictions and Insights into the Default Tariff Cap

"The wholesale market remains the main driver of bills, and unfortunately there is no immediate prospect of prices there returning to historic averages."

Dr Craig Lowrey Principal Consultant
wind turbines and solar
Get in Touch to Find Out How We Can Support Your Business

Fill in your details and we will get back to you as soon as possible with more information about our solutions.

Get in Touch