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How Much Do Energy Companies Really Make?

Do Energy Companies Suffer Too? | UK Radiators
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How Much Do Energy Companies Really Make?

According to the Domestic Energy Price report: “​​Household energy bills increased by 54% in April 2022, a record increase, and are likely to rise substantially again in October.” This adds to the ever-increasing issue of rising costs of living. In addition, the 2021 Family spending in the UK report by ONS also showed that 18% of the UK household weekly expenditure goes to housing, fuel and power, which is the highest expense all households face.  

How Much Is Your Energy Provider Really Making?

According to the Domestic Energy Price report: “​​Household energy bills increased by 54% in April 2022, a record increase, and are likely to rise substantially again in October.” This adds to the ever-increasing issue of rising costs of living. In addition, the 2021 Family spending in the UK report by ONS also showed that 18% of the UK household weekly expenditure goes to housing, fuel and power, which is the highest expense all households face.  

This constant price increase led us to an interesting question - is this rise in costs affecting the energy companies supplying our energy too? 

How Did The Big 6 Perform In The Last 5 Years?

E.ON’s Profits (2016-2020)

Top of our list we have E.ON. They only made profits in each of the past 5 years with their highest year being 2019 with over 2 billion pounds. The company’s total profits were around 3.6 billion pounds over the past 5 years, which is, on average, equivalent to 3.2 million UK home energy bills. 

British Gas’ Profits (2016-2020)

Second on our list, we have British Gas. They also only made profits in each of the past 5 years with their highest year being 2016 with £495 million in profits. The company’s total profits have decreased over time with a noticeable decrease in 2019 and 2020. However, if we total their earnings over 5 years we see that they made a total profit of £1.6 billion pounds, which is equivalent to 1.4 million UK home energy bills.

EDF’s Profits (2016-2020)

EDF is the first of the big 6 to feature on our list with a year ending in a loss. EDF took a massive loss of £573 million in 2017 but recovered well in the following years making a profit of £362 million and £866 million in 2018 and 2019 respectively. If we add up their profits over 5 years, we see that they made a total of £1.6 billion, which is equivalent to 1.4 million UK home energy bills.

Scottish Power’s Profits (2016-2020)

Similar to EDF Energy, Scottish Power also made a loss in 2017, but the subsequent years were very generous with 2019 being its highest profit year with £758 million in profit.

Their total profit over the 5 years was around £1.4 billion, which is equivalent to 1.2 million UK home energy bills.

Npower’s Profits (2016-2020)

Npower had increasing losses from 2016 to 2018 before turning a profit of £1.6 billion in 2019. However, their total profits in the last 5 years was a net positive of £1.3 billion, which is equivalent to 1.1 million UK home energy bills.

SSE’s Profits (2016-2020)

The final company on our list is SSE, which only had one year (2017) ending in a loss. The company’s profits were lower compared to the rest of the big 6, but they still did make around 700 million in profit over the past 5 years, which is the equivalent of 600 thousand UK home energy bills.

Methodology

We used the list of licensed companies by Ofgem to gather all the Big 6 Energy companies that are licenced in the UK. We then got their official accounts from the UK’s companies house and calculated the total profit after tax for each of the years from 2016 to 2020.

To calculate the average household energy bill we used data published by Ofgem, the energy market regulator, showing that in September 2021 the average UK energy bill was £95 per month, or £1,138 a year.