Category: Reports

Energy profits hit £420bn in recent years as standing charges rise

Energy giants have pocketed over £420 billion in profits since the energy crisis started according to a new analysis of company reports. [1]

Researchers examined the declared profits of firms ranging from energy producers (such as Equinor and Shell) through to the firms that control our energy grid (such as National Grid, UK Power Networks and Cadent) as well as suppliers (such as British Gas).

Around £30 billion of these profits (the equivalent of over £1,000 per household) are thought to be made by the firms and business units responsible for electricity and gas transmission and distribution.

These are the “network costs” consumers pay for maintaining the pipes and wires of the energy system and are usually paid for through standing charges on energy bills.

Electricity standing charges have surged in recent years and from 1 April will be 147% higher than in 2021 – powered by fees such as the 14 hidden charges on every bill for network costs.

Gas standing charges have increased by 15% since 2021, but a recent report for the Warm This Winter campaign found that the network costs for gas are charged differently, through both gas unit costs and standing charges.

Researchers found that the estimated price each household contributes on gas network costs has risen from £118.53 a year in 2021 to £163.69 a year from 1 April 2024 (a 38% increase).

From 1 April the costs that households pay for every unit of energy they use will decrease slightly – but are still almost double what they were in 2021. But standing charges will rise. Compared to the previous quarter, electricity standing charges go up 13% and gas standing charges increase 6%.

A spokesperson for the End Fuel Poverty Coalition, commented:

“The energy firms are taking us for April fools.

“As standing charges go up today, households will have to cut back on their energy use just to keep their bills the same. This means households continue to suffer as a few energy firms make billions in profits.

“These numbers may look like fantastic amounts to shareholders, but the reality is that these profits have caused pain and suffering among people living in fuel poverty for the last few years.”

Warm This Winter spokesperson Fiona Waters said:

“The public are beyond frustrated at being a cash machine for companies who use our broken energy system to cream as much profits as they can out of them, while hard working people are up to their eyeballs in energy debt and fat cat bosses splurge their excessive wealth on luxuries.

“This data should put to bed any final opposition to a proper Windfall Tax on energy firms which ministers must use to help people who are still paying 60 percent more than they were on their energy bills three years ago.

“We need to stop pandering to these profiteers and focus on expanding homegrown renewable energy and a mass programme of insulation to bring down energy bills for good.”

ENDS

[1] The data was compiled from publicly available accounts and financial statements, using the best available measure of company profits by a freelance city journalist. These measures differ from company to company due to reporting processes and regulatory requirements in different jurisdictions. In determining which measure of profitability to use, the research has prioritised the measure preferred in the company’s own accounts.

Table 1: GROUP RESULTS FOR FIRMS PROFITING FROM ENERGY CRISIS

COMPANY (profit type) Financial Year (FY) ending in 2020 FY ending in 2021 FY ending in 2022 FY ending in 2023 FY ending in 2024 [interims where available] TOTAL SINCE ENERGY BILLS CRISIS
SSE (Group – Pretax profit adjusted) £1,023,400,000 £1,064,900,000 £1,164,000,000 £2,183,600,000 £565,200,000 £6,001,100,000
Cadent (Group – Operating profit) £924,000,000 £901,000,000 £685,000,000 £945,000,000.00 £2,510,000,000
Electricity North West (Pre tax profit) £87,000,000 £145,600,000 £64,800,000 £26,000,000 £195,000,000 £518,400,000
Northern Powergrid (Net income / earnings) £158,790,000 £195,130,000 £304,150,000 £136,670,000 £794,740,000
National Gas Transmission (Operating profit) £475,000,000 £484,000,000 £512,000,000 £619,000,000 £2,090,000,000
UK Power Networks (EBITDA) £1,270,200,000 £1,294,300,000 £1,328,900,000 £1,410,400,000 £5,303,800,000
Northern Gas Networks (Group Operating Profit) £213,246,000.00 £157,642,000.00 £151,142,000 £210,687,000 £361,829,000
SGN (Operating profits) £600,600,000 £526,500,000 £364,300,000 £439,500,000 £1,930,900,000
Ovo Energy (Operating profits) -£238,000,000 £367,000,000 -£1,582,000,000 -£1,453,000,000
Octopus Energy (Operating profits) -£47,910,000 -£117,400,000 -£188,400,000 £243,300,000 -£110,410,000
Shell (Profit/Adjusted Earnings) £3,828,340,000 £15,238,310,000 £31,497,300,000 £22,317,500,000 £11,628,800,000 £84,510,250,000
BP (Underlying Replacement Cost Profit (URCP)) -£4,495,100,000 £10,123,850,000 £21,845,870,000 £10,930,440,000 £38,405,060,000
Equinor (Adjusted Earnings) £3,111,020,000 £26,453,940,000 £59,202,600,000 £28,613,800,000 £117,381,360,000
Centrica (Adjusted Operating Profit) £447,000,000 £948,000,000 £3,308,000,000 £2,752,000,000 £7,455,000,000
National Grid (Statutory Pre-Tax Profit) £1,754,000,000 £2,083,000,000 £3,441,000,000 £3,590,000,000 £1,371,000,000 £10,156,000,000
EDF (EBITDA) £13,909,640,000 £15,484,300,000 -£4,287,960,000 £34,314,000,000 £13,851,160,000 £73,271,140,000
EON (EBITDA) £5,938,300,000 £6,784,540,000 £6,930,740,000 £8,058,200,000 £27,711,780,000
Iberdrola (EBITDA) £8,608,772,000 £10,324,902,000 £11,376,166,000 £12,398,620,000 £42,708,460,000
Drax (Group – pre tax profit) -£235,000,000 £122,000,000 £78,000,000 £796,000,000 £761,000,000
Wales & West (pre tax profit) -£24,400,000 £25,900,000 -£176,900,000 £263,100,000 £87,700,000
TOTAL PROFIT £420,395,109,000.00

Table 2: RESULTS FOR FIRMS OR BUSINESS UNITS INVOLVED IN GAS AND ELECTRICITY DISTRIBUTION AND TRANSMISSION (i.e. network costs)

COMPANY Type FY ending in 2020 FY ending in 2021 FY ending in 2022 FY ending in 2023 FY ending in 2024 [interims where available] TOTAL SINCE ENERGY BILLS CRISIS
SSE E Transmission £218,100,000.00 £220,900,000.00 £380,500,000.00 £372,700,000.00 £215,600,000.00 £1,407,800,000.00
SSE E Distribution £356,300,000.00 £267,300,000.00 £351,800,000.00 £382,400,000.00 £120,100,000.00 £1,477,900,000.00
Cadent G Transmission & Distribution £924,000,000.00 £901,000,000.00 £685,000,000.00 £945,000,000.00 £2,510,000,000.00
Electricity North West E Distribution £87,000,000.00 £145,600,000.00 £64,800,000.00 £26,000,000.00 £195,000,000.00 £518,400,000.00
Northern Powergrid E Distribution £158,790,000.00 £195,130,000.00 £304,150,000.00 £136,670,000.00 £794,740,000.00
National Gas G Transmission & Distribution £475,000,000.00 £484,000,000.00 £512,000,000.00 £619,000,000.00 £2,090,000,000.00
UK Power Networks E Distribution £1,270,200,000.00 £1,294,300,000.00 £1,328,900,000.00 £1,410,400,000.00 £5,303,800,000.00
Northern Gas Networks G Transmission & Distribution £213,246,000.00 £157,642,000.00 £151,142,000.00 £210,687,000.00 £361,829,000.00
SGN G Transmission & Distribution £543,000,000.00 £509,000,000.00 £339,000,000.00 £452,000,000.00 £256,000,000.00 £2,099,000,000.00
National Grid E Transmission £1,316,000,000.00 £1,027,000,000.00 £1,055,000,000.00 £993,000,000.00 £838,000,000.00 £5,229,000,000.00
National Grid G Transmission & Distribution £347,000,000.00 £337,000,000.00 £637,000,000.00 £715,000,000.00 £2,036,000,000.00
National Grid E Distribution £909,000,000.00 £1,069,000,000.00 £472,000,000.00 £2,450,000,000.00
National Grid E Systems £443,000,000.00 £443,000,000.00
SP Energy Networks E Distribution £860,000,000.00 £905,408,000.00 £940,238,000.00 £1,059,348,000.00 £3,764,994,000.00
Wales & West G Distribution -£24,400,000.00 £25,900,000.00 -£176,900,000.00 £263,100,000.00 £87,700,000.00
TOTAL PROFIT £30,486,463,000.00
Cost per household £1,051.26

Data as at 26 March 2024.

The data was compiled by freelance business journalist David Craik. David’s experience has included writing business and city news and features for national newspapers and magazines such as The Daily Mirror, Sunday Times, Wall Street Journal, Scotsman and Daily Express. Much of his content focuses on company financial results and reports in the energy sector and on personal finance issues including wealth management, property, investing and managing household budgets and bills. If any firm wishes to correct the records below, please email info@endfuelpoverty.org.uk.

Customers set for £1.3bn bill for energy debt charges

Households will be paying energy firms a combined £1.3bn in annual charges to help suppliers recover bad debt from 1 April.

A new report from the Warm This Winter campaign also casts doubt on the effectiveness of the charges in actually helping customers struggling with their bills. [1]

Energy firms were already able to charge £842m a year on bills for bad debt allowances, but from 1 April 2024 Ofgem has ruled that an additional £735m can be charged (or £28 per household per year). The amounts are offset by a £275m adjustment to the bad debt charges incurred after the Covid pandemic. 

The combined impact of these charges varies depending on the bill type with prepayment meter customers paying the least at £25.17 per household per year. Direct debit customers pay £38.96 a year on these charges while standard credit customers are hit hardest paying £129.71.

The report also reveals that “debt-related costs” consist of three main elements: bad debt write offs, debt related administrative costs and working capital. It appears unclear if these write offs will come off customers’ accounts, or if they are written off on supplier income statements while the debt is sold to debt collection agencies.

In addition, the debt related administrative costs and working capital include recouping the costs of the moratorium on involuntary prepayment meter installations. The moratorium was brought in after it was found energy firms were breaking into vulnerable people’s homes to force them onto a prepayment meter.

Firms can also claim for the administrative costs to suppliers from dealing with customers in debt, despite other allowances in the price cap enabling them to cover operating costs. The allowances also allow firms to claim for the day-to-day costs of customer arrears and using the money to cover the period between an energy firm incurring costs and receiving customer payments.

The news has been met with concern from consumers, with new polling from Opinium finding that over half (55%) of the public oppose energy firms using money raised through the additional £28 per household being spent on debt administrative costs. [2]

The public felt that around half (48%) of the money raised from the £28 debt charge should be spent writing off household energy debt of the customer accounts of those most in need.

Fiona  Waters, spokesperson for the Warm This Winter campaign commented:

“Energy bill payers are quite rightly up in arms about these additional costs which look like they do nothing to reduce the debt of ordinary people but instead help energy companies pursue those who simply can’t pay.

“It’s yet another outrageous rip off caused by our broken energy system, where ordinary people are expected to foot the bill all the time whilst energy giants bank billions and their bosses live in the lap of luxury.

“We need long term solutions such as expanding homegrown renewable energy and a mass programme of insulation to bring down energy bills for good so UK families no longer find themselves in debt through no fault of their own and are hounded for payments.”

A spokesperson for the End Fuel Poverty Coalition, said:

“The recovery of energy debt led to the forced prepayment meters scandal in 2023 and customers are still paying the price for energy firms’ poor practices.

“Rather than hit hard pressed households with higher standing charges, we need to see a longer-term approach to solving the energy debt mountain, such as an industry wide Help To Repay scheme.

“If Ofgem persists in implementing this charge, the very least they can do is ensure it is used to write off debts from customer accounts and isn’t spent on hiring debt collection agencies.”

Policy expert and report author Richard Winstone, added:

“Ofgem produced over 350 pages of documentation to reach a conclusion that will cost the public hundreds of millions of pounds extra this year with no clear benefit for consumers. They pack their documents with complicated jargon and formulae, yet they could not find room for a simple explanation as to how this money will actually benefit those struggling with their energy bills. 

“Throwing money at suppliers and hoping they do the right thing is what has led to record profit levels from the likes of British Gas at a time when customer service standards are at their lowest for a decade and customer debt is at its highest. Ofgem either needs to stop increasing the cost to consumers or start creating regulation that ensures suppliers use the additional funds for specific, consumer-benefitting, purposes.”

Jan Shortt, General Secretary of the National Pensioners Convention, commented:

“As always, it is the customer that pays, not the shareholders or energy industry who are currently making the biggest profits for years. Sustainable and affordable energy sources are a must and the regulator should consider how it can protect customers from this unacceptable level of levy when everyone is still struggling with high energy bills.”

ENDS

[1] “An overview of the additional debt related costs”, Richard Winstone / Warm This Winter, March 2024. Full report available to download. 

[2] Public opinion polling from Opinium who interviewed 2,000 people between 15 and 19 March 2024. Results were weighted to be representative of the UK population.

55% oppose using the money to cover admin costs, 25% support, 20% don’t know.

48% figure is based on respondents choosing a range of percentages to be used to write off debt. The figure includes the responses from 16% who felt none of the money should be used in this way, 16% felt all of the money raised should be used in this way. 

Hikes in gas network costs see vampire funds profit from energy crisis

British households are boosting the profits of Chinese and Qatari Government-backed funds, which are among the groups benefiting from a 38% increase in the costs of running the country’s gas network.

A new report from the Warm This Winter campaign and Future Energy Associates has examined the ownership and revenue streams of firms running the nation’s gas infrastructure. [1]

The cost of running the gas network is charged to customers through gas unit costs and standing charges. The estimated price each household contributes has risen from £118.53 a year in 2021 to £163.69 a year from 1 April 2024 (a 38% increase). [2]

Unit costs are also driven by wholesale gas costs. Gas unit costs paid by households more than tripled at the height of the energy bills crisis and even after the latest Ofgem price cap change, every unit of gas remains 73% above 2021 levels. The daily gas standing charges customers face have also continued to increase and will not peak until the coming months, reaching 15% above 2021 levels from 1 April 2024. [3]

Of the significant owners of gas infrastructure operators, just one company is headquartered in the UK [4]. Among the 12 other owners are the sovereign wealth funds of Qatar and China, investment firms from Australia, Canada, Germany, Hong Kong and the USA alongside additional Australian and Canadian pension funds.

Among the firms profiting from the misery of increased energy bills is Macquarie, the Australian finance giant at the centre of recent Southern Water and Thames Water scandals. [5]

Macquaire co-owns 80% of National Gas, the national gas network as well as part-owning the UK’s largest regional gas distribution network company, Cadent, which supplies gas to 11 million homes. 

The report sets out that Gas Distribution Networks (GDNs) operate as natural monopolies and that the complexity in negotiations between the regulator and the firms risks tilting the balance in favour of the industry, potentially leading to excess profits at the expense of consumers.

Among the criticisms of the negotiation process are the reliance on long-term cost forecasting, informational advantage firms hold over their costs and their ability to hire expensive lobbyists and consultants which poses a risk of regulatory decisions favouring the industry, resulting in unjustifiably high prices for consumers and excess profits for the companies.

Starting from 2026, energy consumers could also face an annual bill increase of up to £43 to fund the decommissioning of the gas network, as highlighted in a new Ofgem consultation on price controls for gas and electricity transmission networks. 

Fiona Waters, spokesperson for the Warm This Winter campaign, which commissioned the report said: 

“Once again the British public is being gaslighted by an opaque and broken energy system which sees huge amounts of obscene profits going overseas and inflates bills for ordinary people who are still paying 60% more than they did three years ago. 

“Families, pensioners, children and the poor are freezing as energy companies generate billions of pounds in profit each and every week.”

A spokesperson for the End Fuel Poverty Coalition, commented:

“This murky web of international investors with deep pockets and influence are heaping pain on the nation’s households.

“The regulator is operating with one hand tied behind its back and it needs to be given powers to ensure that the firms that operate our gas network do so in the best interests of the public, not their shadowy owners.

“Ultimately, this is an industry that is dying on its feet as we move toward cleaner, safer heating systems for our homes. But we should not let these vampire funds suck cash out of hard working families’ pockets as they decommission the network.”

Dylan Johnson from Future Energy Associates commented:

“Government regulation is crucial to control the prices charged by these companies, ensuring efficiency and security of supply without unfairly burdening consumers. 

“This regulatory process involves negotiations between the companies, who aim to maximise their profits, and regulators, tasked with balancing affordable consumer prices with the need for efficient and reliable service. 

“At the moment the balance is not right and the regulator needs to take a stronger stance in negotiations.”

Jonathan Bean, from Fuel Poverty Action said: 

“It’s frightening that the Government has let a notorious investor take control of a large chunk of our energy infrastructure.  It means higher energy bills for us all.”

The report makes several recommendations for Ofgem to consider, including proposals to deliver immediate consumer rebates by network companies to address profits not in consumers’ interests and the use of real market data instead of long-term forecasts. 

The report also finds that consumer bodies should be empowered to request price control reviews in cases of excessive financial returns and ensuring balanced representation of consumer interests in regulatory decisions.

ENDS

This news story relates to England, Scotland and Wales only.

[1] Warm This Winter Tariff Watch: Gas Networks Report (March 2024): Download the full report.

[2] The Bank of England inflation calculator suggests that a solely inflationary linked increase in these costs would be from £118 to £139 – 18% increase.

[3] End Fuel Poverty Coalition records: https://www.endfuelpoverty.org.uk/about-fuel-poverty/ofgem-price-cap/ 

[4] Gas network owners:

The gas transmission network (described as the “motorway of the gas network”) is run by National Gas, which is owned by a consortium 80% of Macquarie Asset Management, British Columbia Investment Management Corporation, and National Grid plc (20%). 

Macquarie Group, an Australian powerhouse in the financial services sector which also controls parts of the UK water and sewage network, has emerged as a dominant force in the global infrastructure sphere, most notably through its ownership of National Gas in the UK. The British Columbia Investment Management Corporation (BCI) is a pivotal but relatively obscure financial institution managing the pensions of about 525,000 British Columbians. National Grid is one of the world’s largest utilities firms and is listed on the London stock exchange.

The gas distribution network (described as the “local roads of the gas network”) is ultimately owned by eleven firms:

Entity Type of firm (HQ) GDN Ownership Relevance
Qatar Investment Authority Sovereign wealth fund (Qatar) Owns stakes in critical infrastructure, including gas sectors.
Macquarie Asset Management Investment Manager (Australia) Macquarie invests and manages large numbers of global assets with a strong focus on infrastructure.  
Hermes Investment Management Private company – investment management (USA*) Investment Management firm that invests in a broad range of low risk assets. 
China Investment Corporation Sovereign wealth fund (China) Involved in owning critical infrastructure, focusing on energy sectors.
Allianz Capital Partners Private company – asset management (Germany) Specialises in infrastructure and renewable energy investments.
Brookfield Infrastructure Partners Public company – infrastructure management (Canada) Owns diversified infrastructure assets, including utilities.
Ontario Teachers’ Pension Plan Board Pension fund (Canada) Invests in a variety of sectors, including infrastructure, with a focus on stable, long-term returns.
Global Infrastructure Partners Private company – investment (USA) Manages a broad range of infrastructure assets; recent acquisition by BlackRock raises profile.
CK Hutchison Holdings & Affiliates Public company – conglomerate (Hong Kong / Cayman Islands) Owns a significant stake in utilities through multinational conglomerate structure.
Power Assets Holdings See above (Hong Kong) Part of the CK group, focuses on electricity generation, transmission, and distribution.
State Super Pension fund (Australia) Invests in critical infrastructure, including significant stakes in the aviation sector.
* Hermes Investment Management (registered in the UK) is owned by Federated Hermes, a US-based investment manager.

[5] Described by critics as a “vampire kangaroo”, in 2022, Southern faced allegations of “environmental vandalism” for releasing untreated sewage continuously for over 3,700 hours at 83 bathing water beaches in just the first eight days of November. The repercussions of a substantial debt load and potentially insufficient investment during the Australian company’s ownership of Thames Water continue to linger, with ongoing incidents of sewage leaks contaminating waterways, impacting farms and residences, and causing harm to wildlife years after the company divested its remaining stake in Thames Water.

Fuel poverty statistics reveal households hit hard by energy bills crisis

New data published by the Department for Energy Security and Net Zero has revealed that a surge in the numbers of households spending more than 10% of their income on energy in England.

The number of households who are required to spend more than 10% of their income after housing costs on domestic energy has risen to 36.4% of households (8.9 million households) up from 27.4% in 2022 (6.7 million).

Meanwhile, the average fuel poverty gap (which measures the additional money a household would need to be lifted out of fuel poverty) has increased by 66% between 2020 and 2023 in real terms, due to rising energy prices.

E3G UK energy lead, Juliet Phillips, explained that for those already in fuel poverty, things have got significantly harder:

“It is shameful that in a country as wealthy as England, so many households cannot afford to heat their homes to a healthy and comfortable level. New statistics show that no progress has been made in reducing fuel poverty rates in the past year, and that for those struggling to pay their energy bills, things have gotten a lot worst.

“We have seen a concerning inertia from the government over the last year on action to upgrade homes. This included a U-turn on the planned increase in energy efficiency standards in the private rented sector, and a significant under-delivery of the retrofit schemes designed to alleviate fuel poverty.

“If the UK is to have any chance of meeting its statutory target to end fuel poverty by 2030, a long-term plan is needed to rebuild confidence in supply chains: backed by investment and regulations to drive action to deliver warmer homes across the country.”

The statistics also show that households in the private rented sector are at the highest risk of fuel poverty. This follows Rishi Sunak’s U-turn on the planned uplift to minimum efficiency standards in the sector last year.

Jonathan Bean, spokesperson for Fuel Poverty Action, commented:

“Fuel poverty rates are highest in private rentals so the Government’s lack of commitment to improved standards will continue to harm millions.

“In addition, electric-only homes have the highest fuel poverty rates due to the four times higher price of electricity compared to gas, due to our rigged energy market which the Government and Ofgem have failed to reform.

“It is time to admit Government and Ofgem policies have completely failed, and a more radical solution to fuel poverty is needed – Energy For All.  This would eradicate fuel poverty now, rather than allowing millions to suffer in cold damp homes for another decade.”

The statistics show that there were an estimated 13.0 per cent of households (3.17 million) in fuel poverty in England under Ministers’ preferred measure of fuel poverty, known as the Low Income Low Energy Efficiency (LILEE) metric in 2023. This number is effectively unchanged from 13.1 per cent in 2022 (3.18 million).

A spokesperson for the End Fuel Poverty Coalition explained the limitations of this metric:

“Even these terrible figures don’t paint the true picture of the suffering in households across the UK.

“They exclude millions of homes in certain energy performance categories, fail to take into account soaring energy costs and also don’t include many people who actually get a Warm Home Discount to help with their bills.

“The reality is that household energy debt is at record levels, millions of people are living in cold damp homes and children are suffering in mouldy conditions.

“The wider impact of high energy bills is also clear to see with households having to cut back on spending so much that the UK has now entered a recession.”

Nearly 1 in five households in the West Midlands are classed as fuel poor. Meanwhile, in the South West, it would take an extra £634 to lift homes out of fuel poverty.

The latest National Energy Action (NEA) Fuel Poverty Monitor, developed with Energy Action Scotland and Gemserv, highlighted over 3 million UK households could be left in fuel poverty by the end of the decade, despite a legal requirement for no households in England to be living in fuel poverty by 2030.

Adam Scorer, Chief Executive of National Energy Action, added:

“At this rate, the government will miss its 2030 legal fuel poverty target by a country mile and millions will be stuck unable to afford to keep their homes and their families warm and well.”

New polling by YouGov for NEA shows that three in 10 (30%) GB adults say their household has found it difficult to afford to pay their energy bills in the past three months.

This has driven many to drastic ‘not coping strategies’ with 59% of British adults saying they had turned their thermostat down lower than they wanted, while 52% turned their heating off, even though it was cold inside the house.

Revealed: The charges keeping electricity bills high

Freezing households are being hit by 14 obscure energy charges that are keeping electricity bills expensive.

The figures are revealed in the latest Warm This Winter Tariff Watch Report by researchers at Future Energy Associates which examines the electricity network costs which are added to customers’ standing charges and bills. [1]

Among the 14 charges which get passed onto bills through the Ofgem price cap, customers are hit by costs such as the ‘Non-Locational demand residual banded charge’, ‘Available Supply Capacity Charges’, ‘Electricity Systems Operator Internal Allowances’ and ‘Ancillary Services costs.’ [2]

Also hidden in the charges are so-called “Line Losses” which set out the amount of energy lost while transmitting electricity around the network. These losses are added to consumers’ bills as a set amount, rather than reflecting the actual wastage incurred.

The combined impact of some of these costs and charges has meant Electricity Standing Charges have surged 119% since winter 2020/21 and account for £194 a year for every household. 

Separately, the report reveals rules which allow Distribution Network Operators (DNOs) who maintain and upgrade the grid to keep money charged to consumers but not spent.

The DNOs forecast budgets in advance and overestimation of these costs can mean that DNOs underspend and could potentially profit under a complex system called the “totex incentive mechanism” (TIM). This splits the benefit of any underspend between customers and the DNO. 

Between 2015 and 2022, DNOs spent £933 million less than they forecasted, but those that did underspend will have only given around half of that money back to consumers. [3]

The new findings also reveal that energy firms have underspent on plans to upgrade the electricity network. While these firms have overspent on short-term costs, the lack of investment in the grid is one of the reasons that electricity prices remain high despite Britain’s successful renewables industry. [4] 

The Warm This Winter Tariff Watch report also paints a poor picture for consumers looking to switch around for the best energy deal. While there are more tariffs on the market, the researchers could only find a handful of deals worth switching to and these all came with complex conditions or caveats.

Two groups which continue to lose out are those who pay on standard credit terms and are subject to a 6.2% premium and those on Economy 7 tariffs. 

One EDF overnight tariff, aimed at EV owners, offers an average nighttime electricity unit rate of just 8.00 pence per kWh across all DNO regions. In stark contrast, the Standard Variable tariff, serving as an Economy 7 equivalent from the same firm, imposes a significantly higher night-time unit rate of 16.63 pence per kWh.

A spokesperson for the End Fuel Poverty Coalition, commented:

“The complex world of electricity pricing should now be firmly in the sights of regulators and ministers.

“There must be a review into how we have arrived at so many covert charges and Ofgem must improve the transparency in the calculation of how our standing charges are arrived at.

“Of particular concern is the system whereby we are paying upfront for vital infrastructure upgrades which could help bring down electricity bills, but which are seemingly not delivered.

“We need a full audit of what has been charged, what has been spent and what could be returned to the bill payer.”

Fiona Waters of the Warm This Winter campaign, which commissioned the report added:

“The findings of the latest Tariff Watch Report reveal a disgraceful picture.

“Hardup households are being punished multiple times by energy giants. Our energy bills are still forecasted to remain well above 2021 levels for the rest of the year and the vital grid infrastructure upgrades needed to bring electricity costs down are potentially not being delivered.

“Perversely, the failure to upgrade and maintain the grid then results in line losses, which consumers also have to pay for via their bills.”

Dylan Johnson, Director at Future Energy Associates commented: 

“Ofgem must improve transparency around Distribution Use of System (DuOS) charges. There’s a clear need for a centralised repository on their website, detailing these costs, and the formulas used for their calculation. 

“Additionally, Ofgem should revisit their methodology for Line Losses, especially as we transition to a more decentralised energy system. 

“For instance, in areas like Cornwall during sunny hours, Line Loss calculations must reflect the reduced losses when electricity is generated and consumed locally. This change is crucial for a fair and efficient energy system.”

ENDS

[1] This press release refers to England, Scotland and Wales only. For full details, methodology and sources, the full report is available to download: https://www.endfuelpoverty.org.uk/wp-content/uploads/Tariff_Watch-3-FINAL.pdf

[2] Full list of charges:

  1. Non-Locational demand residual banded charge – all domestic users contribute to the fixed costs of maintaining the transmission network.
  2. Transmission Network Use of System Non-Half-Hourly demand tariff – cost of using the transmission network to supply electricity and factors in the cost of infrastructure investment and the need to ensure network reliability and capacity for future demands. Paid by consumers on unit rates.
  3. Distribution Use of System Consumption Charges – charges are based on the electricity consumption of an organisation, with rates varying according to the time of use.
  4. Meter Point Administration Number Standing Charges – a fixed daily charge applied per Meter Point Administration Number (MPAN), covering the fixed costs of electricity distribution.
  5. Available Supply Capacity Charges – These are levied based on the assigned Available Supply Capacity (ASC) of an organisation, with higher capacities incurring greater charges.
  6. Reactive Power Charges – Applied for the reactive power used by an organisation, which is essential for maintaining voltage levels within the distribution network.
  7. SOLR Fixed charge – to cover costs associated with collapsed energy firms
  8. Excess SOLR Fixed charge – to cover costs associated with collapsed energy firms
  9. Eligible Bad Debt Fixed Charge Adder – an additional charge to cover the costs associated with uncollectible debts.
  10. Balancing Use of Systems Balancing Mechanism – when there is a variance between scheduled energy generation and actual demand, the Balancing Mechanism activates to maintain grid stability.
  11. Ancillary Services costs – this covers a range of services, including frequency response, demand flexibility service, reactive power and reserve services. 
  12. Electricity Systems Operator Internal Allowances – Internal costs (allowed revenue) are calculated in the Price Control Financial Model.
  13. Balancing Use of Systems Energy Trading Costs – these are costs for trading done with generators outside of the balancing mechanism e.g. forward trading via bilateral agreements.
  14. Line Losses – the amount of energy lost while transmitting electricity around the network.

[3] Electricity North West, National Grid Electricity Distribution and UK Power Networks are the worst offenders. These three companies taken together have a combined underspend of more than £1.1bn.

The reason this is more than the 933m total is that some DNOs – especially Scottish Power Networks – have overspent. Scottish Power Energy Networks (operates MANWEB and South Scotland) does have some of the highest standing charges in the UK. 

DNO allowance and expenditure cumulative 2015-16 to 2021-22:

DNO Operator (sharing rate) DNO Region Allowance Expenditure Difference
£m £m £m %
Electricity North West (58%) North West          2,085         1,917 -168 -8%
Northern Power Grid (56%) North East          1,472         1,515     43 3%
Yorkshire         1,953         1,921 -32 -2%
National Grid Electricity Distribution (70%) Midlands         2,318         2,329       11 0%
East Midlands         2,346         2,312 -34 -1%
South Wales         1,228         1,163 -65 -5%
South West         1,890         1,831 -59 -3%
UK Power Networks (53%) London         2,007         1,741 -267 -13%
South East         1,941         1,657 -284 -15%
East Anglia         2,889         2,622 -268 -9%
Scottish Power Energy Networks (54%) South Scotland         1,747         1,792       45 3%
MANWEB         1,952         2,037       85 4%
Scottish and Southern Electricity Networks (56%) North Scotland         1,492         1,519       26 2%
Southern         2,635         2,670       34 1%
Total GB       27,957       27,023 -933 -3%

[4] Underspend has generally been in longer term investment in networks i.e. network reinforcement and replacing equipment and totals c.GBP2.5bn. Conversely over-spend has generally been in shorter term operational activities and totals c.GBP1.5bn.

Struggling households need £73 a month off energy bills to keep warm this winter

Data commissioned by the Warm This Winter campaign has revealed how much it would take to enable struggling households to be able to afford their energy bills. [1]

A fifth (21%) said that they need over £100 a month off their energy bills. On average, people struggling to pay energy costs said they need £73 a month off their bills to keep themselves warm this winter.

A fifth (21%) said that they need over £100 a month. On average, people struggling to pay energy costs said they need £73 a month off their bills to keep themselves warm this winter.

For those in work, the figure is £71 and for those who are not working, it rises to £77 a month.

Furthermore, Ofgem is expected to increase energy bills by 5% from 1 January and predictions from experts show that prices will remain high until March 2025.

Over a third (38%) of people from households where someone is under 5, pregnant, over 65 or with preexisting health conditions think they won’t or may not be able to afford to put the heating on at all this winter. Almost two thirds (62%) already want to put the heating on, but are worried about the cost. 

A wide range of health, poverty, housing and environmental organisations and academics have called on the Chancellor, Jeremy Hunt MP, to help families most in need of support through the introduction of an Emergency Energy Tariff and a help to repay scheme for those in energy debt.

The Emergency Energy Tariff would use the existing Energy Price Guarantee mechanism to fix the unit costs and standing charges for vulnerable groups at a lower level. Campaigners have suggested that this is fixed at the levels of energy bills in winter 2020/21, which would see eligible households’ monthly energy bills reduced by approximately £87 a month from current levels – a saving of around 46%. [2]

Polling suggests 83% of the general public – who have an opinion would support such a measure [3].

A spokesperson for the End Fuel Poverty Coalition, commented:

“If the UK Government thinks that people will be able to get through this winter without more support for their energy bills, then they are living in cloud cuckoo land. 

“We need to see the Chancellor introduce an Emergency Energy Tariff for vulnerable households and a Help To Repay scheme for those in energy debt.

“Even in winter 2024/25, energy bills will be 79% higher than winter 2020/21. Record prices are here to stay and the UK Government needs to take action to help people stay warm this winter and every winter through increased support for insulation and renewables.

“Failure to avert this cold homes crisis will lead to pressure on the NHS, a mental health catastrophe and additional winter deaths caused by living in cold damp homes.”

Fi Waters, spokesperson for the Warm This Winter campaign, said:

“The Government is now running dangerously out of time to help people who are most at risk of the health complications of living in cold damp homes.

“People want to see bills come down permanently, which is going to require further government action.

“We need to see beefed up programmes to insulate homes, more heat pumps fitted, which are cheaper to run, and more homegrown renewable energy built so we can get off expensive gas.”

The initial research to inform the development of the proposal and targeting of support was undertaken by the University of Oxford’s Environmental Change Institute and Cambridge Architectural Research.

ENDS

[1] Methodology note: Opinium conducted a nationally representative survey among 2,000 UK Adults from the 20th – 24th October 2023. Results were weighted to be nationally representative.

Previous research found that 18% of the population spent last winter in cold damp homes, with a quarter of people with health conditions unable to heat their homes to a safe standard (26%, 4.75m).

UK population NET: Working NET: Not working
Base: All answering who would need to cut down essential spending, or couldn’t afford their bill even with essential cuts, or said they were unsure if their bill would be affordable (Weighted) 1339 845 493
[113] £101 or more 21% 17% 28%
281 141 140
[88] £76-£100 17% 18% 13%
222 156 66
[63] £51-£75 20% 24% 14%
269 199 70
[38] £26-£50 14% 15% 13%
191 127 64
[13] £1-£25 2% 3% 2%
32 23 9
[0] I do not need bills to come down in order to stay warm this winter 3% 3% 4%
45 23 22
Don’t know 22% 21% 25%
300 176 124
Average 73.0 70.7 77.2

[2] The full copy of the letter is available online: https://www.endfuelpoverty.org.uk/wp-content/uploads/231101-Chancellor-AS-Letter.pdf 

[3] Polling figures on support for the Emergency Tariff exclude those who responded “don’t know”. Including Don’t Knows still sees consistent support in the high 60s, low 70s percentage. 

Call for Emergency Energy Tariff as vulnerable households fear the winter

Over half of people from vulnerable households (56%) are worried about being cold this winter, according to new data from Opinium, commissioned by the Warm This Winter campaign. [1]

The figure rises to 63% among people living in a household where someone is suffering from a pre-existing health condition or is disabled.

Meanwhile, over a third (38%) of people from households where someone is under 5, pregnant, over 65 or with preexisting health conditions think they won’t or may not be able to afford to put the heating on at all this winter. Almost two thirds (62%) already want to put the heating on, but are worried about the cost. 

Three quarters (76%) of people living in households with young children will be putting in place measures to keep warm this winter, with almost a quarter (23%) saying the family will be going to bed early to keep warm. 

For people from households where there is an expectant mother, almost nine in ten (88%) are taking cost saving measures, with over a third (35%) of pregnant mothers or their partners saying that they will spend more time in public heated places (for example a library, community centre or warm space).

The energy bills crisis is now predicted to be so severe that a wide range of health, poverty, housing and environmental organisations and academics have written to Chancellor, Jeremy Hunt MP, to request the introduction of an Emergency Energy Tariff.

The Emergency Energy Tariff would use the existing Energy Price Guarantee mechanism to fix the unit costs and standing charges for vulnerable groups at a lower level. Campaigners have suggested that this is fixed at the levels of energy bills in winter 2020/21, which would see eligible households’ monthly energy bills reduced by approximately £87 from current levels – a saving of around 46%. [2]

SUPPORT THIS IDEA?

CLICK HERE TO Sign the petition

The coordinator of the End Fuel Poverty Coalition, which is part of the campaign to introduce the Tariff, commented:

“The reality of this winter is that, without support, we will be a nation sheltering in warm spaces, cowering in one room of our homes or wrapped up inside like the michelin man. This should not be acceptable in a modern society. 

“Failure by the Government to avert this cold homes crisis will lead to pressure on the NHS, a mental health catastrophe and additional winter deaths caused by living in cold damp homes.

“The proposed Emergency Energy Tariff is a specific, targeted, time limited and practically possible intervention which the Chancellor can make to send direct help to households who are most at risk of living in cold damp homes. 

“The Government should meet with charities and industry to finalise the details of the proposal. It can then use the opportunity of the Autumn Statement to send a clear message to the public that Ministers understand their suffering and are prepared to help them stay warm this winter.”

Polling suggests that 83% of the public who have an opinion would support such a measure – with support consistently high among all demographic groups and all parts of the UK [3].

The research also suggests that, among those who will have to cut back on essentials to afford their energy bills or can’t afford them, the plans for an Emergency Energy Tariff would provide them with enough financial support to enable them to avoid the worst of the winter crisis. [4] 

Fi Waters, spokesperson for the Warm This Winter campaign which commissioned the research, commented:

“As millions of households batten down the hatches and prepare for a miserable winter in cold damp homes, only the Government can now prevent a winter crisis.

“As well as this emergency tariff for those now priced out of the market, people want to see bills come down permanently, which is going to require government action. We need to see beefed up programmes to insulate homes, more heat pumps fitted, which are cheaper to run, and more homegrown renewable energy built so we can get off expensive gas.”

Jan Shortt, General Secretary of the National Pensioners Convention:

“Government financial support for this winter is absolutely crucial to older and vulnerable people. A longer term effective policy of addressing fuel poverty must contain genuine and active moves to sustainable, renewable and affordable energy.”

The Chancellor has also recently been urged to use the Autumn Statement to tackle record levels of existing energy debt through a Help To Repay scheme, which would be in addition to support for tariffs to prevent debt levels escalating further.

Researchers examined the make-up of groups who think they will or could be  unable to afford to turn the heating on this winter and found little difference between groups who work or do not work and found that 27% of people who are not on benefits can’t or may not be able to afford to heat their home. However, with 50% of benefit recipients saying they will not or may not be able to afford to turn their heating on, campaigners have also called for the Government to upweight pensions and benefits in line with inflation and remove punitive measures such as the two-child benefits cap.

The initial research to inform the development of the proposal and targeting of support was undertaken by the University of Oxford’s Environmental Change Institute and Cambridge Architectural Research.

Dr Jason Palmer, Cambridge Architectural Research:

“Financial support for households struggling with fuel poverty is critical this winter, and only with government help will the most vulnerable people stay out of hospital and avoid anxiety from going into debt. This support should run in parallel with much greater investment in energy efficiency to address fuel poverty and bring down carbon emissions from homes.”

Dr Tina Fawcett, Associate Professor, University of Oxford:

“Our research has helped identify how to effectively target vital support to households most at risk this winter. To avoid future energy bill crises, locally we need more investment in energy efficiency and energy advice, and nationally we must rapidly reduce our dependence on fossil fuels.”

Rachael Williamson, Head of Policy and External Affairs, Chartered Institute of Housing:

“Our members see first hand the impact that high energy prices are having on some of the most vulnerable. Even before the recent rapid increase in gas and electricity prices, approximately 4.5 million UK households were living in fuel poverty. An emergency energy tariff would help provide targeted support for those most at risk this winter. This should be coupled with a longer-term strategy to develop a social tariff, boost energy efficiency and tackle energy debt so we can reduce fuel poverty and carbon emissions.”

Alex Massey, Head of Policy, Public Affairs and Campaigns, MND Association

“People living with MND have been hardest hit by the energy crisis. Many rely on a wide range of personal powered equipment at home to maintain life, health and wellbeing. Consequently, soaring energy costs have placed many households in an impossible financial position. Targeted government investment is now essential to prevent people living with MND being forced to choose between which vital piece of medical equipment to switch off this winter.”

ENDS

Notes to Editors

[1] Methodology note: Opinium conducted a nationally representative survey among 2,000 UK Adults from the 20th – 24th October 2023. Results were weighted to be nationally representative. 

Previous research found that 18% of the population spent last winter in cold damp homes, with a quarter of people with health conditions unable to heat their homes to a safe standard (26%, 4.75m).

[2] Read the pdf of the letter online: https://www.endfuelpoverty.org.uk/wp-content/uploads/231101-Chancellor-AS-Letter.pdf

[3] Polling figures on support for the Emergency Tariff exclude those who responded “don’t know”. Including Don’t Knows still sees consistent support in the high 60s, low 70s percentage. 

[4] On average, researchers found that these groups felt they needed £73 off their monthly bill this winter to make it affordable to heat their homes to a comfortable level. The proposed Emergency Energy Tariff would provide approximately £87 off the bills.

People unable to clear energy debts as calls for Help to Repay scheme increase

One in four people with energy debts (24%) are currently unable to repay, according to new research commissioned by National Debtline.

The debt advice service is leading a coalition of 13 organisations calling on the Chancellor to introduce a ‘Help To Repay’ scheme in the Autumn Statement.

The findings, based on UK-wide research commissioned from Opinium, show that an estimated 6.4 million UK adults (12%) are behind on their energy bills heading into this winter – an increase of more than 824,000 since April.

More than one in five people (22%) say they have cut back on food and other essentials in order to keep up with energy bills (an estimated 11.6 million people). Two thirds (66%) say they will reduce how much they use the heating this winter.

Meanwhile millions of people have sold personal possessions (9%, 4.7 million), used their overdraft (7%, 4 million) and turned to high-cost credit (4%) in an effort to stay on top of rising energy costs.

The research also reveals the difficulties facing people falling behind in resolving their situation. Of those currently behind with their energy bill, 21% said their supplier had not accepted an affordable offer of repayment – and 18% had been unable to get through to their supplier when they tried to contact them to discuss the debt.

One in four (24%) say they are regularly losing sleep worrying about their energy debt.

The findings come as energy debt hit its highest-ever level of £2.6 billion, according to the energy regulator Ofgem.

A coalition of 13 organisations led by National Debtline and including National Energy Action, Scope and the End Fuel Poverty Coalition, have written to the Chancellor, Jeremy Hunt, urging him to introduce a ‘Help to Repay’ scheme to provide repayment matching and debt relief for unaffordable arrears.

Separate National Debtline research shows that almost three quarters of UK adults (73%) think people who have fallen into energy debt due to high prices should be given help to reduce what they owe.

David Cheadle, acting chief executive of the Money Advice Trust, the charity
that runs National Debtline, said:
“High energy costs have left millions trapped in energy debt – and these
households urgently need support this winter. The Government now has only a limited window of opportunity to act, which is why we are calling on the Chancellor to use the Autumn Statement to step in with the help people need.

“Our Help to Repay proposal would help bring down the record £2.6 billion energy debt in the market – and offer a lifeline to people whose incomes simply will not stretch to pay off their energy arrears. It would also have the support of the general public – with 73% backing this kind of government help.

“National Debtline advisers hear every day of the toll that energy debts are taking on people’s lives and health, and the urgency of the situation cannot be underestimated. Crucially, no one needs to go through this alone. I would urge anyone struggling to cope with their energy bills to seek free, independent debt advice as soon as possible.”

Matt Copeland, head of policy and public affairs at National Energy Action, said:
“Debt levels in the energy market are at an all-time high after years of unaffordable prices. And monthly energy bills for many will be higher this winter than the last. The impact that this has on low-income households is
profound. One-third of British adults say they will struggle to pay their energy bills this winter.

“Ofgem’s proposal to raise the price cap as a way of dealing with the increased debt only exacerbates the problem. Failure to provide support to reduce energy bills and energy debt would be catastrophic, leaving millions of households unable to stay warm and healthy this winter.

“A ‘Help to Repay’ scheme would accelerate debt payments, ease the burden on household budgets, and help create a more sustainable energy market.”

James Taylor, executive director of strategy at disability equality charity Scope, said:
“Winter hasn’t hit yet and already Scope’s energy helpline is being inundated with calls from disabled people facing eye-watering amounts of debt. On average, our customers have almost £1,800 worth of energy debt – more than double this time last year. That’s despite cutting back everything they can.

“Life costs a lot more for disabled people, who need more energy to power wheelchairs and breathing equipment, or have the heating on more for their health. The government must defuse this debt timebomb, bring in emergency support for this winter, and keep its promise to consider an energy social tariff which would end sky-high bills for disabled people.”

This month Ofgem announced plans to increase energy bills by £17 per household to reduce the risk of energy firms going bust or leaving the market – a decision that Fiona Waters a spokesperson for the Warm This Winter campaign called  “appalling.” Waters added:

“The government needs to put the public’s need for an affordable energy supply ahead of the demands of energy giants.”

Fixed price tariffs could trap customers on higher bills

The second Warm This Winter Tariff Watch report has revealed that the energy market has 337 fixed price tariffs that are more expensive than the current Ofgem price cap. 206 tariffs will still be more expensive than the predicted January price cap.

Consumers on these tariffs will be paying a penalty for having fixed their energy bills and with an average exit fee of £138, many households could feel trapped into remaining on tariffs which now represent a bad deal.

The report also reveals an unwelcome league table of the exit fees some energy firms charge for leaving a tariff early. [1]

Just one in twenty (6%) British Gas tariffs come with no exit fees – and the firm’s average exit fee is £62. Among the other main suppliers, 12% of EONs tariffs have no exit fees, 14% of EDF and 15% of Ovo’s tariffs are free of exit fees.  Ecotricity, Utility Warehouse, So Energy also had small proportions of their tariffs with zero exit fees.

On the other hand, almost all tariffs for Good Energy, Octopus and Cooperative Energy come with no exit fees. However, one smaller supplier, Ecotricity, charges the highest exit fees, averaging £150.

As unit costs have come down in recent months, but are expected to increase again in January 2024, the report reveals that customers could save money over the next 12 months if offered a “one year fixed” tariff with unit rates and standing charges below the current price cap. [2]

These rates for a direct debit customer are as the below:

  • Standing Charges: Electric 53 p/day, Gas 30 p/day
  • Unit Rates: Electric 27 p/kWh, Gas 7 p/kWh

However, the analysis shows there just ONE dual fuel fixed tariff currently on the market is below these levels. For the best variable deal, the report authors predict that the current best offer could be with two different suppliers.

The report also reveals that energy firms’ operating costs are making up £242 (an average of 13%) of customers’ bills.

In an analysis of firms’ operating costs, the report reveals that energy firms may be spending almost as much on marketing, which includes sponsoring football teams, event venues and creating TV adverts (c.11% of operating costs), as they do on operating customer contact centres (c.12% of operating costs).

Operating costs, which go into the standing charges paid by households, also consist of central overheads, such as office rents and the cost of maintaining energy meters.

The report also reveals that suppliers are now expected to make an additional £140m in profit on the nation’s energy bills over the next 12 months, thanks to changes to the Ofgem price cap which came into force on 1 October.

The new rules mean that firms now make an average £64.70 profit per customer per year, up by £4.70 per customer. The projected 12 month profits for all energy suppliers has hit £1.88bn, an increase of £140m from the previous Warm This Winter Tariff Watch report (an 8% increase).

The predictions are in addition to any profits which firms have already made in 2023, which stand at a conservative estimate of over £2bn. [3]

A spokesperson for the End Fuel Poverty Coalition, commented:

“With energy prices subject to change, customers should exercise extreme caution when thinking about switching and fixing and we would call on companies to waive exit fees so people can switch easily to the cheapest tariff available.

“And while households suffer, the Government sits on its hands and refuses to introduce longer term tariff reforms which could bring down bills and help people stay warm this winter and every winter.

“Indeed, with the Prime Minister recently halting work to improve the energy efficiency of buildings, Britain’s households will be trapped in cold damp homes for years to come.”

Fi Waters, spokesperson for the Warm This Winter campaign which commissioned the report, said:

“Energy firms spending £242 per customer on operating costs adds insult to injury for UK households struggling to stay warm this winter. Customers should not be subsidising fancy headquarters, entertaining and marketing when these companies are making billions. That money should be used to end energy debt and lower bills. It’s yet another example of our broken energy system which the government and energy firms seem to be in denial about.”

ENDS

This press release refers to England, Scotland and Wales only. For full details, methodology and sources, read the full report available at: https://www.endfuelpoverty.org.uk/wp-content/uploads/Tariff_Watch_2_Final_Oct_2023.pdf

[1] Minimum, maximum and average single fuel exit fees per supplier for fixed tariffs in the last two years.​​

Energy firm Minimum exit fee Maximum exit fee Average exit fee Count of zero exit fee tariffs % with zero exit fees
Ecotricity £100 £200 £150 0 0%
Utility Warehouse £25 £75 £46 0 0%
So Energy £5 £75 £27 0 0%
Shell Energy £30 £75 £44 1 1%
British Gas £30 £100 £62 7 6%
E.ON £25 £30 £29 3 12%
EDF Energy £15 £200 £66 29 14%
OVO Energy £30 £75 £37 30 15%
SSE £30 £75 £40 19 33%
ScottishPower £30 £150 £66 66 40%
Outfox the Market £30 £300 £62 24 47%
Sainsbury’s Energy £30 £30 £30 9 69%
Affect Energy £75 £75 £75 25 93%
Ebico Living £75 £75 £75 33 94%
Co-operative Energy £75 £75 £75 85 98%
Octopus Energy £75 £75 £75 249 99%
Good Energy £0 £0 £0 4 100%

[2] Best tariff prices correct as of 2 October 2023. The energy market is constantly changing and customers should always check for the best deal based on their actual usage. The information on suppliers is solely a reflection on tariff prices and takes no other factors into account (e.g. customer service levels, support for vulnerable households etc). Households should always think before they fix. 

Advice provided in this press release should not be seen as formal financial advice. Energy prices are volatile and subject to significant changes at short notice. Ofgem updates its price cap calculations every quarter. Future Energy Associates advise that households who suspect they may be on overly expensive energy tariffs should explore alternative options on price comparison websites, consult with their energy suppliers, or seek guidance from consumer advocacy groups, such as Citizen’s Advice to determine the most suitable steps for them.

[3] Declared profits from 2023:

Among the firms which also provided energy, but whose supply side profits are harder to quantify EDF, profits lept to £2bn (€2.3 billion) in the first half of 2023. Ofgem is consulting on plans to make profits reporting more transparent.

Winter energy crisis inevitable warn MPs

MPs on the House of Commons Energy Security Committee have warned that another winter energy crisis is “inevitable” without further Government support for households.

The cross-party Committee took evidence from organisations, including the End Fuel Poverty Coalition members, energy firms and regulators. The final report acknowledges that more support for energy bills will be needed this winter.

End Fuel Poverty Coalition members put forward examples of dangerous behaviour that households resorted to in order to try and keep bills down last winter. But despite the Government help for households last winter, almost 5,000 excess winter deaths were caused by living in cold damp homes.

In its final report, the Committee recommended that the energy firms improve the customer service and the empathy shown to households this winter – as well as providing a priority crisis line for charities working with the most vulnerable.

MPs also suggested that the Government must take steps to get 2022 Energy Bills Support Scheme cash to households who missed out, extend the Warm Home Discount and reform cold weather payments. It also recommends radical overhaul of standing charges and the introduction of a social tariff for vulnerable households.

The coordinator of the End Fuel Poverty Coalition was one of the experts called to give evidence to the Committee. They commented:

“This is a welcome report full of practical recommendations that could help avert the looming cold homes crisis this winter.

“We’re disappointed there is nothing specific in the report to help the millions of households in debt to their energy firms and who are running just to stand still with their payments. Frontline charities have recently backed proposals sent to ministers to introduce a “Help to Repay” scheme to tackle the growing mountain of energy debt.

“But the big elephant in the room is if the Government will listen to the eminently sensible suggestions from MPs and take urgent action to keep people warm this winter.”

Recently the End Fuel Poverty Coalition wrote to the new Secretary of State to issue a warning about the risks of the winter ahead and to offer additional suggestions to help tackle fuel poverty in the short and long term.

This week the Coalition, which is part of the Warm This Winter campaign, also joined more than 400 organisations to write to the Prime Minister asking the Government to think again about weakening of net zero policies which could cause lasting damage to the UK economy.

For poverty campaigners, the PM’s decision to rule out increased energy efficiency standards comes with serious implications. New Citizens Advice figures revealed that private renters wasted £1.1bn this year on energy that leaks out of their homes, with this figure now set to continue.

A spokesperson for the End Fuel Poverty Coalition said:

“There is a real-life cost to the PM’s posturing – especially for the millions of households who rent from a private landlord. Many will now face high bills and cold damp homes forever after being abandoned by the Government.

“Last winter, the health problems caused by living in cold homes mounted up. The Prime Minister and Energy Secretary should be focussed on providing help for households to survive this winter and improve their living conditions in the long run.

“We need the Government to double down on support for households, including improving energy efficiency and reforming electricity pricing markets to ensure customers can enjoy the advantages of more affordable renewable electricity.”