Predictions and Insights into the Default Tariff Cap
Cornwall Insight is a trusted provider of forecast models for the Default Tariff Cap, commonly known as the price cap. Here, we present our latest predictions for the upcoming cap periods and address frequently asked questions regarding the cap. Our webpage serves as a reliable source of information for anyone interested in staying up to date with the price cap.
Current predictions: calculated from market closing prices on 21 February 2024
Figure 1: Cornwall Insight’s Default Tariff cap forecasts using new Typical Domestic Consumption Values (dual fuel, direct debit customer)
|Electricity (2,700 kWh)
|Gas (11,500 kWh)
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)
|Standing Charge (£/day)
|Per Unit Costs (p/kWh)
|Standing Charge (£/day)
|Per Unit Costs (p/kWh)
Note: All 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.
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Frequently asked questions:
1. What is the price cap?
The price cap is a limit on what suppliers can charge domestic consumers per kilowatt hour of energy used, known as the unit rate, and a limit on the standing charge (p/day) which covers the cost of supplying energy to your home.
The price cap for Q124 (Jan – Mar) is set at £1,928 per year for a typical consumer.
The price cap for Q224 (Apr – June) will fall to £1,690 per year for a typical consumer.
2. What is a typical consumer?
To give people an idea of what an average household may be paying under the price cap Ofgem has devised Typical Domestic Consumption Values (TDCVs) for gas and electricity.
Under the newly updated Ofgem definition, a customer with a Typical Domestic Consumption Value (TDCV) uses 2,700kWh per annum for electricity and 11,500kWh per annum for gas.
While the average consumer cap is helpful for comparison and based on the stated TDCVs, the cap is not a finite limit on the total cost of energy a customer pays per year on their energy bills, this is based on a household’s energy consumption.
The cap will also vary depending upon where in the country you live, with our figures representing the national average.
3. How often does the cap change?
The cap changes on a quarterly basis – Q1 (January to March inclusive), Q2 (April to June inclusive), Q3 (July to September inclusive) and Q4 (October to December inclusive). Electricity and gas are calculated individually, although tariff rates are typically quoted by suppliers for a dual-fuel customer.
4. How is the cap calculated?
The underlying methodology from Ofgem works on a bottom-up basis in which the component elements of the cap are calculated, with these being the wholesale cost of energy and the non-wholesale costs.
The latter includes network charges, low carbon levies and other policy costs, taxes and assumed levels of margin per customer.
5. How do Cornwall Insight calculate the price cap forecast?
We apply the Ofgem methodology with the current wholesale market prices for gas and electricity along with our own view of the non-wholesale elements of the bill.
These are then applied to the identified TDCVs for gas and electricity to calculate the bill for a typical domestic customer.
We calculate the figures for individual regions, with our figures representing the national average.
Find out about Cornwall Insight’s Default Tariff Cap service and how it could help keep you ahead of the curve with the latest developments, policy changes and price cap analysis: Domestic retail price cap predictor
Cornwall Insight is an independent energy research, analytics, and consulting firm. We do not have any influence over Ofgem or its setting of the price cap.