07 August 2023 , 20:23
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Energy suppliers are set to rake in profits of more than £1.7billion in the next year, it has been claimed.
Falling wholesale energy costs and a regulated price cap on millions of bills are likely to boost energy giants’ coffers. Figures from the Warm This Winter campaign and Future Energy Associates suggest suppliers could make £1.74bn over the next 12 months.
That figure is based on the current 1.9% profit margin allowed by Ofgem, and works out as the equivalent of £60 for every customer. But the final number could be even higher if Ofgem lets the margin rise, as proposed.
Simon Francis, coordinator of the End Fuel Poverty Coalition, which is part of the Warm This Winter campaign, said: “This report shines a light on the murky depths of Britain’s broken energy system. Without a fundamental overhaul of the energy grid and energy tariffs, households will continue to lose out while suppliers will profit.”
Tessa Khan, director of pressure group Uplift and also part of the campaign, said: “The government seems to think the energy crisis has gone away. For millions of households, this winter will be as hard as the last.”
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The estimated profits do not take into account losses resulting from Ofgem’s price cap on bills, which suppliers are now allowed to recover. Centrica claimed this was the reason British Gas profits rose almost tenfold to nearly £1billion in the first six months of the year.
Today’s report suggests suppliers are on course to make £60 a year profit per customer.