Ofgem has reduced the typical domestic consumption values (TDCVs) that underpin the headline bill figures quoted alongside the energy price cap. As of July, the regulator says the typical household uses 9,500kWh of gas a year, down 17 per cent from the previous 11,500kWh, and 2,500kWh of electricity, down 7 per cent from 2,700kWh1.
The change is the first revision to the TDCVs to take account of evidence from after the gas crisis1. Household energy consumption has been falling since the early 2000s, dropping by more than a quarter since 2010, but the decline accelerated sharply in 2022 and 2023. Those two years account for 36 per cent of the fall in electricity consumption and 39 per cent of the fall in gas consumption recorded since 20101.
The Resolution Foundation, which set out the figures, attributes the acceleration mainly to price. The typical household energy bill in 2022 was 62 per cent higher than in 2021, after wholesale gas prices spiked following Russia's invasion of Ukraine. Bills rose twice as much in 2022 as they had between the first price cap in 2017 and early 2022. The foundation states that the rise would have been substantially higher had the government not intervened by capping bills with the Energy Price Guarantee from October 20221.
The reduction in use over 2022 and 2023 is equivalent to saving £228 a year on average at today's prices1. The foundation also notes that falling use over the longer term reflects more efficient boilers and appliances and the growing popularity of home generation1.
| Fuel | Previous TDCV | New TDCV | Change |
|---|---|---|---|
| Gas | 11,500kWh | 9,500kWh | down 17 per cent |
| Electricity | 2,700kWh | 2,500kWh | down 7 per cent |
The TDCVs are the benchmark behind the typical household bill figure quoted whenever a cap level is announced, and they sit within the wider price cap framework.
Why it matters for households
The TDCV is not a cap on what any household pays. It is the assumed usage figure used to turn unit rates and standing charges into a single headline number. A household using more gas or electricity than 9,500kWh and 2,500kWh will pay more than the quoted typical bill, and one using less will pay less. Because the assumed figures have fallen, the same unit rates now produce a lower headline bill than they would have under the old values, which is a large part of why the published figure can move without any change to the rates themselves. Households comparing their own bills against the cap figure are therefore comparing against a smaller assumed home than before. The guide to why a bill can be higher than the cap sets out the other reasons the two diverge.
For energy independence, the revision is a measure of how much demand has already been removed from the system. Lower typical consumption means less gas and electricity bought per household, whether through efficiency, changed habits or home generation. The foundation's analysis found the cutbacks were broad-based, with 79 per cent of neighbourhoods reducing gas use by at least 10 per cent and electricity use by at least 5 per cent in 2022, and no area where use did not fall substantially1.
What happens next
The foundation reports that continued volatility in the Middle East risks a repeat of the earlier price spike, and that prices are already set to rise slightly again in October, with bills expected to end up 16 per cent higher than at their lowest between April and June this year1. It adds that only one-sixth of the gas consumption cuts made by the poorest places had been reversed by 2024, and that the gap in gas use between the poorest and richest tenth of areas remained 2,500kWh even after controlling for housing type, insulation and demographics1.
Sources1 cited
- Losing energy • Resolution Foundation, resolutionfoundation.org