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UK energy industry profits surge past £125bn since 2020

Energy giants have generated over £125 billion in profits on their UK operations since the energy crisis started according to an analysis of company reports. [1]

Around £40bn has been made in profit in the UK by just 27 energy firms in the last two years, yet there are continued calls from energy industry lobbyists to axe the Windfall Tax in the next Budget.

Researchers working for the End Fuel Poverty Coalition examined the declared profits firms ranging from energy producers (such as Equinor, Shell) through to the firms that control our energy grid (such as National Grid and UK Power Networks) as well as suppliers (such as British Gas) and energy trading firms (e.g. Vitol).

The total profits generated globally by the firms since 2020 stand at over half a trillion pounds, with over four-fifths (£466bn) generated by firms with extensive involvement in the gas industry. 

This is despite the fact that the gas sector will no longer be able to meet heating demand using only domestically extracted gas by 2027 and as just 14% of the North Sea reserves are now commercially viable according to official statistics [2]. 

Further analysis shows that as households face a fifth winter of sky high energy bills, over £50bn of the profits over five years are generated by electricity and gas transmission and distribution firms. 

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. The firms were recently criticised in a report by the House of Commons Energy Security & Net Zero Committee.

A spokesperson for the End Fuel Poverty Coalition, commented:

“Energy firms continue to post multi-billion pound profits while millions of households struggle to afford to heat their homes. 

“The figures equate to £878 per household, per year in profit. At the same time, average annual energy bills have soared from £1,042 in 2020 to £1,755 today, after peaking even higher in early 2023. [3]

“Even after the temporary windfall tax, oil and gas giants have benefited from exceptional earnings driven by global price spikes, which stands in stark contrast to record energy debt and record levels of fuel poverty. 

“The Chancellor must resist pressure to provide a tax cut to the energy industry in the budget and ensure that the system captures excess industry profits fairly and directs revenues to protect vulnerable households and improve the energy efficiency of the nation’s coldest homes.”

Robert Palmer, Uplift Deputy Director, said: 

“It is scandalous that oil and gas companies raked in billions in recent years whilst millions of people in the UK still struggle with sky high energy bills.

“Worse, these huge profits aren’t going to support the UK’s energy workers, who are being laid off as the North Sea declines, they’re going to overseas shareholders.

“It’s clear this status quo of continuing to prop up the profiteering oil and gas industry with evermore generous public handouts can’t continue. Rather than give into lobbying by oil and gas bosses for tax cuts, the Chancellor needs to focus on the UK’s long-term energy future.

“That means investing in the UK’s renewable energy industries and supporting workers into secure, long-term jobs that actually serve the UK’s needs and bring down bills permanently.”

Faiza Shaheen, Executive Director at Tax Justice UK said:

“Energy companies’ billions in excess profits are extracted from the pain of millions struggling with the soaring costs of energy and essentials.

“Capitulating to industry lobbying and axing the windfall tax would be an unacceptable decision by the Chancellor, and a sign this government is on the side of the profiteers rather than the public. She must use the Budget to properly tax energy companies and big polluters, and invest in bringing down energy bills for ordinary people.”

ENDS

[1] The data in this tracker has been collated from publicly available company reports and industry sources, with profits adjusted where possible to reflect UK operations. For multinational businesses, UK profit estimates are based on disclosed proportions of revenue, production, or operating assets attributable to the UK, or on reasonable assumptions using sector benchmarks where disclosure is limited. The figures are indicative, providing a consistent basis to assess trends in UK energy-sector profitability and its relationship to household energy costs. 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. The totals declared here include offsetting any losses made by some of the firms in some years of the period examined. 30 firms were monitored, with 27 making a profit over 5 years. These firms were selected by the researchers to create a cross section of the energy industry and to reflect those most frequently covered in the media.

Full information available at: https://www.endfuelpoverty.org.uk/news/energy-firm-profits-tracker/ 

Data as at 12 November 2025.

The data was compiled by freelance business journalist David Craik and examined and peer-reviewed by a business analyst with board-level experience within complex multinational businesses. 

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.

[2] https://www.endfuelpoverty.org.uk/north-sea-gas-unable-to-meet-national-heating-needs-from-2027/ 

[3] £125.7bn in profits divided by 28.6m UK households (ONS) is £4,394 over the course of the 5 years of the energy bills crisis or £878 a year. Ofgem price cap figures from https://www.endfuelpoverty.org.uk/about-fuel-poverty/ofgem-price-cap/ 

Chancellor mulls £6bn tax cut for gas firms while slashing warm homes budget

Changes to the windfall tax being considered by Rachel Reeves in this month’s budget could see the oil and gas industry handed a £6 billion tax cut, whilst promised investment in energy efficiency to cut household bills is potentially going to be slashed by the same amount (£6.4bn). 

With tax increases for working people also widely expected, any roll-back on funding for warm homes would represent yet another broken manifesto promise from this Chancellor, say campaigners. 

According to media briefings reported by The Guardian, the Treasury is considering diverting funding from the £13.2 billion Warm Homes Plan — a programme designed to improve cold, damp homes and permanently lower household energy bills — in order to fund short-term energy bill support.

The proposed move would effectively cut the UK’s energy efficiency budget by 40% over five years by substituting parts of the Warm Homes Plan for existing schemes.

Meanwhile, proposals drafted by the oil and gas lobby group Offshore Energies UK, which are being considered by the Chancellor, suggest that removing the Energy Profits Levy at the end of this year, as the industry is pushing for, would lead to a tax loss of £6 billion to the UK Treasury over the next decade.(1) 

The oil and gas industry has been lobbying hard for months to scrap the windfall tax in order to reduce their tax bill, despite the sector posting billions in profit, and companies like Shell reporting negative UK taxes last year.

In response to the proposed tax cut, Robert Palmer, deputy director of Uplift said:

“Oil and gas companies have made billions in recent years while millions of people in the UK have struggled with unaffordable energy bills. Worse, firms have chosen to hand these windfalls to overseas shareholders rather than reinvesting them to support UK jobs. To even be considering scrapping measures to cut household bills while cutting taxes for profiteering oil companies would be deeply unfair.” 

Palmer also called out the poor economics of the basin and warned Reeves against propping up an industry that is only profitable because of the UK’s generous tax regime.

“The reality is the North Sea is in rapid decline, with most of the gas already burned – and what’s left is increasingly expensive to extract. New drilling is only viable if we hand out even bigger tax breaks to wealthy energy companies, taking money away from public services. Quite apart from the climate impact, it is economic lunacy to continue to allow drilling that would not be viable without the Treasury’s thumb on the scale.”

Simon Francis, coordinator of the End Fuel Poverty Coalition, commented:

“Giving tax breaks to fossil fuel giants and failing to collect tax from large corporations while cutting support for those in fuel poverty are short-term acts of weakness by the Chancellor.

“We obviously understand the urgent need to cut energy bills, but the Chancellor – who previously brought us the Winter Fuel Payment fiasco – is not thinking things through. Taking action to improve energy efficiency helps to cut  bills in the long run, protect health and reduce our dependence on expensive fossil fuels. 

“It’s entirely possible to bring down energy bills in a fair way — by improving insulation, reforming electricity pricing, and using public investment to upgrade our grid. Instead, we’re seeing the Government ignore long-term solutions while considering tax cuts to those who need them least.”

The latest data shows that around 12.1 million UK households are struggling with unaffordable energy bills, with 5 million of those in deep fuel poverty — spending over 20% of their income on energy.

Annabel Rice, senior political adviser at Green Alliance, said: 

“If the government is serious about lowering people’s bills for good, they must invest in insulating our homes, not raid schemes that have helped families lower their energy costs to make their sums add up in the budget. 

“We’ve seen more than five different insulation schemes from the government in recent years in England and they show us one thing: stop-start policies confuse homeowners, make jobs in this industry less viable and create uncertainty for investors. With almost nine million families in fuel poverty as winter approaches, it’s time for a fully funded, long term Warm Homes Plan.”

The Warm Homes Plan had been expected to support a wide range of upgrades including insulation, heat pumps, home energy advice, and local council-led retrofit schemes. It was announced as a cornerstone of the UK’s mission to reduce energy demand, support vulnerable households, and cut carbon emissions.

But experts warn that diverting its funds to cover existing schemes will drastically limit its impact, especially for households living in the worst conditions — and risks undermining the Government’s own statutory targets to end fuel poverty by 2030.

Jonathan Bean, campaigner at Fuel Poverty Action, said:

“The Government should be focussed on getting homes fixed, and replacing the failed Eco4 scheme with a well funded home upgrade program that delivers high quality work and guaranteed bill savings.  We need a bigger investment in retrofit skills and quality control, not a budget cut that ends up in the pockets of the oil and gas giants.”

Cuts of 40% to energy efficiency measures considered by Chancellor

Reports in the media suggest that the Chancellor is set to raid the funding for its flagship Warm Homes Plan to pay for energy bill reductions.

The breakdown of the £13.2bn Warm Homes Plan funding was due to be announced last month and was expected to include additional support for social housing, heat pumps, home upgrade loans and local authority-led retrofit schemes.

At the Comprehensive Spending Review, the End Fuel Poverty Coalition stressed that this £13.2bn must be addition to the c.£8.5bn (over 5 years) budget for existing schemes like the Energy Company Obligation (ECO). The Coalition wrote to Ministers [pdf] setting out reforms needed to this scheme following a critical National Audit Office report and has in the past called for this to be funded via general taxation.

However, the proposals briefed to the Guardian would effectively substitute parts of the Warm Homes Plan for existing schemes. This would essentially reduce the total £21.7bn energy efficiency pot by 40% over 5 years, harming the very efforts that would help to bring down bills in the long term and help end the suffering of people living in cold damp homes.

A spokesperson for the End Fuel Poverty Coalition, commented

“Any cuts to the Warm Homes Plan or other programmes to improve housing conditions would be a short-sighted act of betrayal by the Chancellor.

“These electorally popular policies can help bring down energy usage in a safe way and improve the energy efficiency of the homes of people in fuel poverty.

“We obviously understand the urgent need to cut energy bills, but the Chancellor – who previously brought us the Winter Fuel Payment fiasco – appears to be listening to the wrong people.

“It is entirely possible for the Government to help reduce energy bills, but Ministers need to look in the right place for changes.

“Given that between a quarter and a third of the average energy bill is profit for different parts of the energy industry, the Chancellor should look at how the Windfall Tax could be improved, rather than giving tax breaks to energy firms as she is being lobbied to do.

“Other ways to bring down bills include addressing electricity pricing and inefficiencies in the market, using public investment to help fund grid upgrades and real reform of standing charges. We would be happy to talk to the Chancellor about our recommendations.”

The industry trade body, Energy UK, has also set out economic reasons why this move could harm efforts to improve cold damp homes.

New report exposes energy firm profit bonanza in 2024

An investigation by Unite the union has found that energy firms made £30 billion in profits in just one year, every family paying around £500 on the average energy bill just to fund those profits. This is the second report to arrive at a similar figure, with the Common Wealth think tank suggesting profits make up 24% of an energy bill.

A spokesperson for the End Fuel Poverty Coalition, commented:

“At a time when energy debt is soaring and millions are living in cold, damp homes, it cannot be right that the system continues to prioritise corporate profits over people’s health and wellbeing.

“Instead of turning a blind eye or listening to the powerful lobbyists calling for a cut to the Energy Profits Levy, Ministers must make sure excess profits are clawed back and used to cut bills.

“With proper investment in reforming energy pricing, providing support with bills and a national Warm Homes Plan to upgrade our leaky housing, this Government could end fuel poverty for good.”

Ofgem responds to energy debt crisis as MPs demand action

Ofgem has today announced plans to “reset and reform” how energy debt is handled, including a new Debt Relief Scheme that aims to write off up to £500m of historic arrears for around 195,000 households.

The regulator says the first phase will focus on people on means-tested benefits with debts built up during the energy crisis, alongside new rules to support customers in difficulty and reforms designed to stop debt building up in future.

Ofgem also plans trials to change how energy accounts are set up when people move home, and will introduce a new “Know Your Rights” guide for consumers. The full consultation will be published in the coming weeks, with the scheme expected to launch in early 2026.

A spokesperson for the End Fuel Poverty Coalition, commented:

“We welcome Ofgem recognising the scale of the energy debt crisis and we are broadly supportive of the Debt Relief Scheme, but announcing plans before the consultation is even published raises questions about whether they’ve been bounced into action by this week’s Energy Select Committee report.

“In this report, MPs got it right: this energy debt crisis needs bolder, faster action and must be funded through excess energy industry profits, not pushed back onto struggling households.

“Bill-payers have already handed over hundreds of millions to cover debt recovery, yet energy debt has spiralled to £4.4bn. The current system has clearly failed, and unless Ofgem is given the powers to protect consumers properly, this crisis will keep repeating every winter.”

MPs back major reforms to energy bill support

MPs on the Energy Security and Net Zero Committee have backed a series of reforms to make the energy system fairer and support households facing a fifth winter of high bills.

In a major report on tackling the energy cost crisis, MPs recommended a permanent energy debt relief scheme funded through energy sector excess profits, automatic support for vulnerable households, a social tariff for energy and reforms to the Warm Home Discount. 

The Committee also called for urgent action to fix unfair standing charges, improve data sharing to target support and overhaul Cold Weather Payments to ensure help reaches those who need it when temperatures drop.

Crucially, the Committee echoed the Coalition’s warnings about the growing energy debt crisis and proposed a structured, long-term solution to write off unpayable arrears without passing costs onto billpayers. 

It also urged the Government and Ofgem to act quickly to rebuild trust in the energy market, strengthen consumer protections and ensure households are not penalised for reducing gas use as the energy system transitions.

A spokesperson for the End Fuel Poverty Coalition, commented:

“This report should be used to mark a turning point in the fight to end the energy cost crisis. The cross-party group of MPs have recognised what millions of households already know – our energy system has been stacked against people struggling to heat their homes and urgent change is needed.

“We are particularly pleased that MPs have backed the principle of energy debt relief funded through excess profits in the sector, alongside a social tariff, reforms to standing charges and improvements to the Warm Home Discount and Cold Weather Payments. These are landmark recommendations that could protect the most vulnerable.

“As this report makes clear, warm homes must be treated as a public health priority, with fair pricing, modernised winter protections, social tariffs and stronger rights for renters.

“If the Government is serious about implementing change, the Warm Homes Plan announced next month must be the first step. That means a £13.2 billion plan to create warmer and safer homes for those most in need, independent quality checks, skilled green jobs, trusted local advice services and prioritisation of the lowest-income households in the coldest homes.”

In responses to Government consultations, charities and fuel poverty experts have set out the key tests the Government’s forthcoming Warm Homes Plan and Fuel Poverty Strategy must meet. These include:

  • Treating warm, safe housing as a public health priority and retain the target to end fuel poverty by 2030
  • Adopting a 10% fuel poverty measure (after housing costs)
  • Committing to a 10-year national retrofit programme, agreed across parties, backed by skilled jobs, apprenticeships and national standards
  • Prioritising the Worst First — low-income households in the coldest, least efficient homes
  • Guaranteeing independent retrofit assessment, performance monitoring and consumer protections
  • Providing free, trusted local advice services and one-stop-shops for households
  • Funding delivery through public spending, not new levies on bills
  • Introducing targeted financial support including modernised cold weather payments and social tariffs
  • Empowering local authorities with data access and funding to lead street-by-street schemes
  • Protecting tenants from “retrovictions” and unfair rent rises

The spokesperson added:
“Warm homes are a basic right. This must be the moment the Government finally commits to a long-term plan to end fuel poverty — not just improve averages or fund short-term schemes.

“We need a decade-long Warm Homes Plan that delivers real-world warmth, safety and affordable bills, backed by independent quality checks, trusted advice and proper protection for tenants and consumers.

“After years of delays and stop-start programmes, it’s time to get on with delivery and ensure support reaches those in deepest need first.”

ENDS

The full report can be read here: https://publications.parliament.uk/pa/cm5901/cmselect/cmesnz/736/report.html

The End Fuel Poverty Coalition’s evidence to the inquiry can be read online.

Wind power set for further investment

The government has unveiled its long-awaited Contracts for Difference “AR7 budget” for offshore wind, with £900 million for fixed projects and £180 million for floating wind.

The announcement comes as new UCL research shows wind power has already saved UK consumers billions, cutting wholesale prices and shielding homes from volatile gas markets.

Yet with strike prices of £113/MWh for fixed wind and £271/MWh for floating, concerns remain that bills may increase, while ministers insist that the government “won’t buy at any price.”

A spokesperson for the End Fuel Poverty Coalition, commented:

“The North Sea is running out of gas and new gas power plants could take the best part of a decade to even get off the ground. Britain simply can’t rely on fossil fuels for its energy security.

“That’s why renewables are so important. They cut our dependence on gas imports and prices and create jobs where they’re needed most. But this transition has to be managed fairly.

“The public deserve to clearly see how they benefit, through lower electricity prices, greater transparency on how the strike prices work, and clear profit caps that ensure developers don’t cash in at consumers’ expense.”

Blair Institute’s ‘reset’ plan risks powering delay, not progress

A new report from the Tony Blair Institute for Global Change backs calls for a “reset” of the UK’s electricity strategy, but critics warn it could play into the hands of those seeking to slow down clean-power investment.

A spokesperson for the End Fuel Poverty Coalition welcomed “any serious discussion about how to make our energy transition smarter, faster and fairer,” but also commented:

“Given that by 2027 the North Sea will no longer be able to provide enough gas to heat our homes, this report must not become a pretext to delay vital moves to improve energy security and bring down bills.

“Scrapping contracts for green power, weakening support for renewables or backing away from decisive grid upgrades will continue to keep households locked into volatile fossil-fuel markets and higher bills.

“The report’s conclusions also raise questions about the Tony Blair Institute’s funding and affiliations. As reported by The Guardian, the Institute has received financial support from governments and entities linked to fossil fuel-producing states, including Saudi Arabia and the United Arab Emirates.”

Ed Matthew, UK programme director for the independent climate change think tank E3G said:

“The only solution to get off the gas price rollercoaster is to get off gas.

“Our research shows that it is possible for the Government to reach its 2030 clean power target whilst reducing electricity bills by more than £200.

“But that requires urgent action by government to implement cost cutting policies, including moving levies off electricity bills into the Exchequer [general taxation].”

Jess Ralston, energy analyst at the Energy and Climate Intelligence Unit (ECIU), added: “The public may be more interested in their energy bills than what percentage of clean power the UK reaches in 2030, but renewables are already lowering wholesale power prices by around a quarter, or £25 per megawatt hour.”

Half-hour billing reform must not harm vulnerable households

Some energy customers will soon see the benefits of a switch to a new system for energy bills that will lead to more accurate and transparent bills, cost savings through new ‘time-of-use’ tariffs, and better integration of renewable energy sources.

The Market-wide Half Hourly Settlement (MHHS) programme is designed to help modernise the UK’s energy sector by providing more detailed consumption data – taking readings from customers’ electricity meters every 30 minutes – instead of the current monthly frequency.

However, concerns have been raised about the impact on vulnerable households [letter to Ofgem pdf] and the discriminatory nature of only making the tariffs available on smart meters.

A spokesperson for the End Fuel Poverty Coalition, commented:

“We must ensure that electricity pricing is fair and that everyone can access cheaper ‘time of use’ tariffs.

“Millions of people have already been left behind in the smart meter rollout, and it is vital that the energy industry urgently fixes problems with existing meters and properly compensates customers for failures.

“Outstanding smart meter faults can block access to cheaper tariffs altogether, meaning some households are penalised week after week through no fault of their own.

“The biggest issue we see is when smart meters don’t communicate with suppliers — a problem that lies with the Data Communications Company (DCC) who have been paid millions from our bills yet still don’t operate a fully working system.

“And with North Sea gas production in steep decline and the UK set to rely on imports for 94% of its gas by 2050, we must be accelerating efforts to reform electricity pricing — not embedding unfairness.

“Access to smart tariffs must be universal, and smart meter failures must not become a reason why the most vulnerable pay more for energy.”

Energy bosses warn of further bill increases in evidence to MPs

Electricity prices could increase by a fifth, according to evidence given to MPs by energy company bosses.

The “big six” energy suppliers were questioned by the House of Commons Energy Security and Net Zero Select Committee about energy bills.

A spokesperson for the End Fuel Poverty Coalition, commented:

“It’s highly concerning that energy bosses have painted such a bleak outlook for energy bills in coming years.

“With over 12 million households struggling with the cost of heating and energy debt at record levels, it’s clear that electricity pricing must be fairer, standing charges reduced and that the Government must look at how any vital investment in energy infrastructure is paid for.

“Ministers and the regulator should set out a clear long-term pathway so that the public knows what the fixed costs of the grid are likely to be, what schemes will be available to help improve energy efficiency and what financial support will be in place to help those in fuel poverty.

“The nation’s energy system is going through huge changes to improve energy security, meet demand* and bring down the cost of generating energy. But as this change happens, the Government mustn’t forget about households struggling through a fifth winter of high bills.”

The End Fuel Poverty Coalition’s written evidence to MPs on the Committee Inquiry [pdf] highlighted how the energy system is unfair by design — with standing charges, supplier failures and gas-linked pricing hitting low-income households hardest.

The evidence recommended:

  • Fairer pricing that reflects cheap renewables

  • A fully funded £13.2bn Warm Homes Plan

  • Social tariffs & lower standing charges

  • A regulator that prioritises bringing down energy bills

*Even the lowest prediction by the National Energy System Operator suggests that electricity demand will increase by 93% between now and 2050.