Let’s have the argument and any day of the week, any hour of the day, any month of the year we will have the argument between cheap, clean renewables that give you energy security, lower bills, the biggest economic opportunity of the 21st century, against their case to say no to all that.

Miliband yesterday at his “clean” energy summit, as reported in the Telegraph.

I have spent some time over the last couple of days trying to find out what the constituent parts of an electricity bill are and what they cost.

Then, when I found out what the parts of a bill cost, I spent some time trying to find out what those costs themselves broke down as.

I still haven’t quite reconciled the numbers I have with the items they are summed as. But there are limits to how long even this slightly-spectrum spreadsheet enjoyer is willing to spend on such things.

Why did you trip to Mililand, I hear you cry?

Well, I wanted to know what part of the present electricity bill – the DTC or Default Tariff Cap as they call it these days – is wholesale costs.

That’s because there has been a lot of blather in recent days about how gas forms the price of electricity. UK is a “price taker, not a price maker” as M. Miliband likes to tell us. Gas nearly always sets the price of electricity in the market (the same source, and elsewhere). Wholesale prices have gone up, we hear, while other parts of the bill have not. This near as dammit proves the case: we need to beat our addiction to fossil fuels, embrace whirligigs, and move into a golden future of cheap energy bills, ironclad energy security, and get a long-term warm fuzzy feeling from saving the planet.

So, what are the facts of the case?

The breakdown of the DTC is to be found on Ofgem’s website, but it is not filed in a useful place, i.e. not in the poorly-named “data portal”, at least I could not find it there. But delve deeply enough, and like the dwarves of Moria, you eventually strike gold, or mithril, or balrogs.

Here’s where you can find the data. Scroll down, and download the Annex of your choice; then you can find out the constituent parts of the DTC. Get yourself Annex 9, go to tab 1c Consumption adjusted levels, and scroll over to cell Y35. There you will find the parts of the present electricity DTC, adjusted down from usage of 3.1 MWh per year to 2.7 MWh per year.* [It’s just one nondescript block of numbers among hundreds. Personally, I think I would have highlighted it.] Here are the numbers.

Typical consumption	Apr 2025 – June 2025
DF	337.30
CM	24.69
AA	13.85
PC	148.25
NC	198.16
OC	96.87
SMNCC	19.03
PAAC	4.53
PAP	4.07
EBIT	22.03
HAP	9.82
Levelisation	3.48
Total_GB average	882.08
inc. VAT	926.18

For some reason, I can’t resize the table. So it’s a bit of a game of tennis to see which item costs what. Sorry about that.

Naturally, the Annex 9 spreadsheet does not bother to tell us what the acronyms stand for. How many can you guess? I must confess to looking some of them up. [I initially asked the AI, but it didn’t perform well. It got maybe half of them correct, and it got some wrong that I already knew.]

I’ll just put an image in here for you to rest your eyes on while you think. Answers are below.

Acronym	What it is
DF	Direct Fuel
CM	Capacity Market
AA	Adjustment Allowance
PC	Policy Costs
NC	Network Costs
OC	Operating Costs
SMNCC	Smart Meter Net Cost Charge
PAAC	Payment method Adjustment Additional Cost
PAP	Payment method Adjustment Percentage
EBIT	Earnings Before Interest and Tax
HAP	Headroom Allowance Percentage

What do the larger parts comprise? Here are the *ballpark* answers for the larger contributors.

Direct Fuel: Wholesale costs (£310), plus Contracts for Difference costs (£27).

Policy Costs: Renewables Obligation (£90); Feed-in Tariffs (£20); Energy Companies Obligation (£24); Warm Home Discount (£11).

Network Costs: Transmission Network (£48); Balancing Service (£35); Distribution Network (£120).

==

Personally, I had thought CfD was filed under “Policy Costs”, but apparently not.

Next, let’s go back whooshing through the mists of time, to see how much inflation has happened to each bit of the bill. The first available data is from April to September 2017.

Typical consumption	Apr 2025 – June 2025	Apr 2017 – Sep 2017	Inflation %
DF	337.30	155.90	116
CM	24.69	3.02	718
AA	13.85	0.00	Infinity
PC	148.25	78.30	89
NC	198.16	119.65	66
OC	96.87	73.28	32
SMNCC	19.03	0.00	Infinity
PAAC	4.53	3.42	32
PAP	4.07	2.09	95
EBIT	22.03	8.44	161
HAP	9.82	4.75	107
Levelisation	3.48	0.00	Infinity
Total_GB average	882.08	448.86	97
inc. VAT	926.18	471.30	97

We have 3 items that didn’t exist 8 years ago; between them they have added £36 to the annual leccy bill. Over the 8 years, core inflation is running at about 32%, so the only parts of the bill that have not exceeded that are the Operators’ Costs and the fixed part of the payment method charge. Every other part of the bill is running rampantly above overall inflation. The Capacity Market has shown 700% inflation over 8 years, although it is still a small part of the bill. As to the CfD part of wholesale, it has gone up about 250% in 8 years (for 2.7 MWh usage, from about £8 to £27: still a small part of the bill overall).

We have a dysfunctional system, and almost every part of the electricity bill is rocketing far above inflation, not just the wholesale prices “set by gas.”

==

M. Miliband promised to cut energy bills by £300. My interpretation (see here) is that this relates to a baseline period of July to September 2024, when the Energy Price Cap, or Default Tariff Cap as they now like to call it, was £1,568. To fulfil his promise, Miliband needs to get the dual fuel bill down to £1,258 from its current £1,849.

Since we are “price-takers” in gas, he is presumably not going to be troubling the gas side of the dual fuel bill. [An interesting aside is that you cannot put a plastic £5 note between the two parts of the Default Tariff Cap. As near as dammit, leccy and gas cost the same.] His savings of £300 must come from the electricity side, the side where almost every element is galloping ahead of general inflation.

The funny thing is, I have just looked at the wholesale part of the price cap in July to September 2024. It was £261.26.

In other words, to knock £300 off our electricity bills of that time, Miliband would have to make the wholesale costs…. Negative. Even the heroic effort of going back to the wholesale costs of 2017 would only save us £110.

To labour the point: his promise is a hollow one.

He might still hit it, if “price taking” UK benefits from lower international gas prices. Then, a substantial part of the savings could come from the gas side.

Message ends.

The featured image is the aberration that is Farr wind farm in the Highlands, via Google Earth. The soothing interlude is a photo I took about 10 years ago in Earlham Cemetery in Norwich.

* The TDCV, Typical Domestic Consumption Value, has been revised down from 3.1 MWh to 2.7 MWh (see explanation at my earlier note).