Latest price predictions

Qyburn

Meanwhile Ofgem's own documents assume 3,100 kWh per year, and government statistics showed 3,600 in 2021. Were these 2,900 and now 2,700 just plucked out of the air for political reasons, to reduce the headline figures?

QrizB

Qyburn said:

Meanwhile Ofgem's own documents assume 3,100 kWh per year, and government statistics showed 3,600 in 2021. Were these 2,900 and now 2,700 just plucked out of the air for political reasons, to reduce the headline figures?

The TDCVs are reviewed every two years. The review history is available from Ofgem's website:
https://www.ofgem.gov.uk/master-publications-library

Prior to 2015, the headline electricity TDCV was 3200kWh/yr. This was reduced in 2015 to 3100kWh/yr, and remained at that value in 2017. The 2019 review (published in Jan 2020) reduced it to 2900kWh/yr, where it remained in 2021 as the review was postponed by COVID (which was felt to be an unfair skew on the energy use of the UK). The 2023 review has just reduced the value to 2700kWh.

TDCVs can be expected to fall, slowly, as the efforts to improve the energy efficiency of UK housing begin to take effect.

dealyboy

@molerat said:

I think they have messed up on those unit price predictions.  The only way I can reconcile the unit prices is by using the new 2700 / 11500 annual consumption amounts and dividing it by the old  2900 / 12000.  Dividing the totals by the new TDCV gives me 6.84 / 7.25 for gas and 29.56 / 28.92 for electric.

... or the annual costs for the typical consumer ... *speculation here*

If I assume the futures unit prices are correct (market close figures 26/06/23) but use the old TDCV values in the table for the new typical consumer price caps by quarter, I get ...

Electricity                2,900                    Q4 2023 = £980.58 (£979.31)     Q1 2024 = £963.47 (£962.05)
Gas                       12,000                                   = £893.05 (£891.96)     Q1 2024 = £939.85 (£938.47)

... noticing that my totals are just over a pound higher compared to the CI figures in each case which could be due to inaccuracies caused by decimal places truncation or rounding.

If I go one step further using the new TDCV ...

Electricity               2,700                     Q4 2023 = £925.54                     Q1 2024 = £909.61
Gas                      11,500                                    = £860.25                                    = £905.10
                                                                            --------------                                   --------------
                                                                            £1,785.79                                    £1,814.71

... sorry if this is nonsense   

CSI_Yorkshire

Wasn't there already the fun that the OFGEM base tables were 3100kWh but the typical customer was 2900kWh?  Will both of these change or just one?

AndyDragon

I fixed at (eon v4) at less than the July svt
i would need to calculate but electric on lower standing charge and lower price between now and then will counter a lot of lower predictions if not work out overall cheaper

gas is a bit harder as it spikes in winter months of course

these are predictions and we all know how variable it is. I think even if accurate the overall savings aren’t going to be massive and the peace of mind is important

wrf12345

"TDCVs can be expected to fall, slowly, as the efforts to improve the energy efficiency of UK housing begin to take effect."

Fall is more likely from consumers going into lower consumption mode though the industry has reacted by increasing standing charges to an absurd level to compensate

MattMattMattUK

wrf12345 said:

"TDCVs can be expected to fall, slowly, as the efforts to improve the energy efficiency of UK housing begin to take effect."

Fall is more likely from consumers going into lower consumption mode though the industry has reacted by increasing standing charges to an absurd level to compensate

The industry has not increased the standing charges, the regulator has, because the things paid for by the standing charge have increased. The suppliers do not get to keep the standing charge, they have to handle the majority of it over to the network operators, National Grid etc. The profit the suppliers can make is capped at 1.8%.

QrizB

In addition to MattMattMattUK's reply above, TDCVs have been falling since 2015. This is not a result of belt-tightening during an expensive winter.

Altior

That is quite interesting. 

The energy efficiency of housing has very little to do with electricity usage does it. This will be more correlated with improvements to technology (LED lighting for example), and appliance efficiency/replacement.  

Being someone from a finance background, this is not a great way to create a benchmark, if the 'ruler' dimensions can be changed every two years. 

Perhaps even more interesting, the gvnts own data doesn't show domestic energy consumption falling at all in any meaningful way, since 2014.

MattMattMattUK

Altior said:

That is quite interesting. 

The energy efficiency of housing has very little to do with electricity usage does it. This will be more correlated with improvements to technology (LED lighting for example), and appliance efficiency/replacement.  

Being someone from a finance background, this is not a great way to create a benchmark, if the 'ruler' dimensions can be changed every two years. 

Perhaps even more interesting, the gvnts own data doesn't show domestic energy consumption falling at all in any meaningful way, since 2014.

I would say that does depend on what one wants from the benchmark. If one wants the benchmark to be a true and accurate representation of cost changes over time then no, if one wants to be able to compare average expenditure over time then maybe, if one wants to manipulate the figures for political benefit, then yes.