British energy companies made £30 billion in profits in 2024, equivalent to around £500 in payments per household, according to data from Unite, one of the country’s largest trade unions.
Profit margins in the energy sector average 23%, the report said, about three times the national average, which hovers around 7-9%. That margin increases to 38% in the network sector and up to 58% in gas extraction, according to Unite.
At the same time, the report states that household energy bills have increased by 42% since winter 2021 and have failed to return to pre-energy crisis levels. Based on energy sector profits calculations, Unite research shows that the average household pays £500 annually in energy companies’ profits.
The report also estimates that “excessive profits” have increased industrial electricity costs by 29%, resulting in Britain having the highest industrial energy costs of any country reporting to the International Energy Agency (IEA), according to DESNZ data.
“What Unite’s energy costs report clearly shows is that households are being looted,” said Unite general secretary Sharon Graham. “Energy bills have risen by 42 per cent since 2021, while energy companies have made £30 billion in profits in just one year. The government is turning a blind eye to these excessive profits. That needs to change. Ordinary people can’t keep paying.”
“The chaos of the current system has resulted in the highest energy bills in Europe.”
The report highlighted that sector gains far outweigh the costs of “green levies” such as the Renewable Obligation and its replacement, the Contracts for Difference (CfD) scheme, which incentivize companies to develop sustainable energy projects. Unite said these would cost around £9.9 billion in 2024, a cost it said would be passed on to consumers through supplier bills, but still amount to just over a third of the profits made by energy companies.
In 2024, National Grid made £4.7 billion in profits, France’s EDF around £1.6 billion, and Swedish government developer Vattenfall, one of Britain’s largest wind developers, made group profits of around £2.6 billion.
An October report from the DESNZ committee found that British households were roughly in the middle £4 billion in energy debta figure that has tripled in the past five years as energy prices have remained high. The committee recommended Ofgem use £4 billion in windfalls from energy network companies to cover debts.
British energy ownership
Global investment companies, foreign governments and billionaires are the main recipients of profits from the UK energy sector, the report found.
US investment firms such as BlackRock and Vanguard, among others, receive “almost half of all profits” from the British energy sector, the report said. BlackRock and Vanguard each own more than 5% of the UK energy system, including stakes in companies such as BP, National Grid PLC and SSE.
The Norwegian government also pocketed around £6 billion in profits from British gas sales through its wealth fund last year, and France and Denmark have both benefited from state ownership of stakes in EDF and wind energy developer Orsted respectively. The report also points to billionaire owners or majority shareholders in companies such as gas generator EP and network infrastructure companies UK Power Networks and Northern Powergrid, which receive significant profits from UK energy assets.
‘If that’s good enough [another] Why can’t Britain own an energy company or have assets that another country currently owns for the benefit of our treasury, our workers and our society?” asks Simon Coop, national Energy and Utilities employee at Unite.
The Union recommends a move towards public ownership of the energy industry, starting with transmission and distribution networks. Unite’s report calculates that this would cost around £90 billion, something Coop said would be money “spent on a profitable asset, which will make money in the long term”. Based on Unite’s profit figures, the energy sector could recoup the costs of nationalization within three years, although these profit figures may not remain constant.
And according to Coop, this step would be completely feasible: “Let’s look back to the days of the energy crisis,” he said. Solar energy portal, “At the time, the cost to the UK government of buying electricity at retail prices from the energy companies was astronomical.”
The government has introduced an energy price guarantee in 2022 limiting bills to around £2,500 a year to protect consumers from the energy crisis caused by the war between Russia and Ukraine. However, the cap on wholesale energy prices reached £4,279 in the first quarter of 2023, and the government made up the difference. This was reported by the Office for Budget Responsibility (OBR), the energy support measures will ultimately cost just over £51 billion in 2022-2023.
“The money was found and put in the right place,” says Coop, “basically to buy electricity to ease the burden on consumers. If the money were found now, it would buy an asset that generates £30 billion in profits every year. You’re buying a very well-run business.
“Why do we always have to talk about public ownership of companies that are going through tough times? Why don’t we get into a position where we have public ownership to generate profits to protect the UK economy?”
According to one YouGov poll from July 202471% of the public believes that energy companies should be publicly owned. It is currently unlikely that the government would consider a fully public ownership model for the energy sector, even if it could muster the resources to do so.
However, Coop argues that the government’s £8.3 billion GB energy tool to publicly finance and own clean energy projects shows “that they want a British company to rival the likes of Orsted, EDF and Vattenfall”, according to Coop. “So let’s move forward, finance it properly, and let’s have a Great British Energy that owns the entire energy network.”
Reducing the energy bill
Clean energy and decarbonisation are regularly blamed for high energy bills in British politics and media. Shadow energy secretary Claire Coutinho said: “the problem with the Climate Act is that it tells us that we must continue to decarbonize while costs continue to rise.”
Coutinho and other clean energy critics are quick to attack the cost of green taxes, which undoubtedly increase energy bills, but ignore the expansion of the energy sector’s profit margins, which are well above the economy-wide average. A survey by Octopus Energy earlier this year found that 88% of the public believe energy bills should be the top priority in government plans to reduce the cost of living.
In May, a collection of manufacturing, industry and climate change groups urged the government to cut industrial energy bills. The open letter to Chancellor Rachel Reeves said high bills had become a roadblock to decarbonising UK industries and households, partly due to the transfer of green charges to bills. The letter called for moving the costs to general taxes to reduce bills for consumers.
Unite data estimates that households pay £500 each year in energy sector profits and that industrial electricity costs are 29% higher for the same reason. Those profits (£30 billion) are more than three times the cost of green energy taxes (around £9.9 billion). Coop suggests that tackling high energy bills by tackling what the Union called ‘energy profiteering’ would ultimately reduce bills and enable greater decarbonisation in the long term.
