This article is published in collaboration with Statista
by Martin Armstrong
Cumulatively between 2016 and 2020, five of the UK's largest energy providers generated a total of £7.7 billion in operating profit. As revealed by an investigation by the Independent, the data obtained exclusively from Ofgem uncovers the degree to which the firms have profited from the generation and supply of electricity and gas over the five year period.
At a time of major price increases being passed onto the consumer - the price cap is set to be increased by 54 percent - the Independent reports: "Electricity and gas bills for a typical household will go up by £693 to £1,971 a year in April when Ofgem lifts the price cap." Ofgem has said that the increase is “driven by a record rise in global gas prices over the last six months”. The cap adjustment will increase energy prices for approximately 22 million customers, the regulator said.
In response to the figures, Mathew Lawrence, director at the think tank Common Wealth, said: “These findings show Big Six firms have profited even as energy bills have surged. If a windfall tax on the vast profits of oil and gas firms is needed, this research raises a key question: should the Big Six face higher taxes on their profits to help support households?”
Referring more specifically to the situation in 2021/22, Ofgem said: “Most energy companies are not currently making a profit and a number have exited the market in the wake of record global gas prices. Ofgem is moving quickly to stabilise the market to ensure customers remain protected.”
Start leaning Data Science and Business Intelligence tools: