Understanding the profits of the large energy suppliers

The six large energy suppliers are complex businesses. They generate electricity and buy gas to supply energy to homes and businesses, as well as trade between different parts of their businesses, both in Great Britain and abroad. Since 2009 we’ve required the large energy suppliers to produce an annual Consolidated Segmental Statements (CSS) to show the costs, revenues and profits for the different segments of their generation and supply businesses. We’re leading the way in making this information easily accessible.

We require the large suppliers to have their CSS independently audited. This is so consumers can have confidence that information on reported profits is accurate and robust. The large suppliers must publish their CSS no later than four months after the end of their financial year.

Following our referral in 2014, the Competition and Markets Authority (CMA) launched a full investigation of the energy market. On 24 June 2016 the CMA issued its final report. It has made a number of recommendations relating to financial reporting requirements – including adding a requirement for the energy companies to provide information on their balance sheets. Following these recommendations, we will be engaging with stakeholders about potential changes to the reporting requirements.  

How much profit did suppliers make in 2015?

Our analysis showed that in 2015 there was a marked difference in outturns for gas and electricity. Despite the fall in revenues, aggregate pre-tax profits from the supply of gas increased between 2014 and 2015, while for electricity they fell significantly. Averaging across the large suppliers, profit margins on both domestic and non-domestic supply have fallen compared to the previous year, although there were big differences between companies.

More detail about trends in suppliers’ profits and costs is provided in our report on the Retail energy markets in 2016. You can view below some interactive charts summarising some of the data provided by the companies in their statements. You can refine and expand chart views as well as download data and graphics based on your selections.

Chart

Javascript is required to render chart Generation profits in £ million by supplier.

Source: Companies’ consolidated segmental statements.

Information correct as of: August 2016

The graph and data table show the aggregate profits in £ million across the generation segment by supplier from 2009 to 2015. Suppliers are required to publish their statements within four months of the end of their financial year. Five of the companies (British Gas, EDF, E.ON, npower and ScottishPower) have financial years ending in December whereas SSE’s financial year runs from April to March.

Policy Areas:

  • Electricity - retail markets
  • Gas - retail markets

Data Table

Generation profits in £ million by supplier
CentricaE.ONEDFnpowerScottishPowerSSE
20091472991,131145165424
2010226142683211352396
2011258293963168260466
201229117387512694392
2013153-587752152415
201438-77598-11880338
20157372602-18128456
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Chart

Javascript is required to render chart Domestic supply profits in £ million by supplier.

Source: Companies’ consolidated segmental statements.

Information correct as of: August 2016

The graph and data table show the aggregate profits in £m by supplier across the domestic supply segment from 2009 to 2015. Five of the companies (British Gas, EDF, E.ON, npower and ScottishPower) have financial years ending in December whereas SSE’s financial year runs from April to March. 

Policy Areas:

  • Electricity - retail markets
  • Gas - retail markets

Data Table

Domestic supply profits in £ million by supplier
CentricaE.ONEDFnpowerScottishPowerSSE
2009595-100-186-23846104
201074219-100-154-4266
201154478-124-56-11250
201260698-92131129318
2013589182-90132153185
2014441205-880180261
2015574177-21-173168248
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Chart

Javascript is required to render chart Aggregate profits in %: supply segment.

Source: Companies' 2015 CSS (adjusted).

Information correct as of: August 2016

The graph and data table show the profit margin (profit before interest and tax divided by revenue) as a percentage (%) across the supply segment from 2009 to 2015.

Policy Areas:

  • Electricity - retail markets
  • Gas - retail markets

Data Table

Aggregate profits in %: supply segment
Total supplyDomestic supplyNon-domestic supply
20091.8%0.9%2.9%
20103.8%3.0%5.0%
20113.1%2.8%3.6%
20123.6%4.3%2.6%
20133.4%3.9%2.5%
20143.7%4.5%2.4%
20153.0%3.9%1.6%
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Chart

Javascript is required to render chart Non-domestic supply profits in £ million by supplier .

Source: Companies’ consolidated segmental statements.

Information correct as of: August 2016

The graph and data table show the aggregate profits in £ million by supplier across the non-domestic supply segment from 2009 to 2015. Five of the companies (British Gas, EDF, E.ON, npower and ScottishPower) have financial years ending in December whereas SSE’s financial year runs from April to March. 

Policy Areas:

  • Electricity - retail markets
  • Gas - retail markets

Data Table

Non-domestic supply profits in £ million by supplier
CentricaE.ONEDFnpowerScottishPowerSSE
2009901301371296104
20102122271626485104
201119215275128165
201218496669478
201314610339852624
20141239740751260
2015-16723563-4112
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Chart

Source: Companies' 2015 CSS (adjusted).

Information correct as of: August 2016

The graph and data table show the aggregate profits in £s million across the generation and non-domestic and domestic supply segments from 2009 to 2015.

Policy Areas:

  • Electricity - retail markets
  • Gas - retail markets

Data Table

Aggregate profits of the large energy suppliers: Generation and supply (£ million)
GenerationDomestic supplyNon-domestic supply
20092311221569
20102010769854
20112408681568
201219511190410
201313581151423
20148581160407
20151312974262
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Chart

Javascript is required to render chart Breakdown of a dual fuel bill.

Source: Companies’ consolidated segmental statements.

Information correct as of: August 2016

This chart provides an estimate of the proportion of different costs in the dual fuel bill of an average domestic customer of the large suppliers in 2015. It is based on information reported by the large suppliers in their annual Consolidated Segmental Statements. For more information, please see our page Understanding the profits of the large energy suppliers.

Policy Areas:

  • Electricity - retail markets
  • Gas - retail markets

Data Table

Breakdown of a dual fuel bill
Annual costPercentage
Wholesale costs43.43%
Network costs23.98%
Environmental and social obligation costs7.35%
Other direct costs0.63%
Operating costs15.80%
Supplier pre-tax margin4.04%
VAT4.76%

More Information

Methodology

To estimate the breakdown of an average gas and electricity bill, we took the sum of each category of costs and pre-tax supply margins as reported by the suppliers for each fuel and then divided by the total number of customers for that fuel. We then added VAT at 5% and summed the implied bill components for gas and electricity together to derive an estimate of the overall costs making up a dual fuel bill.

Note that because it is based on the total costs and customer numbers reported by suppliers irrespective of their tariff type, the bill breakdown for gas will reflect a mixture of the costs of serving gas to dual fuel and single fuel customers – and the same also applies to electricity. As such, the dual fuel breakdown should be considered an approximation in that it will reflect a combination of the costs incurred in serving gas and electricity to both dual fuel and single fuel customers (which may differ if, for example, electricity-only customers consume more electricity than those customers that are also supplied with gas).

The data presented is based on the latest available Consolidated Segmental Statements (CSS). It may differ from the data that can be found in the supplier’s externally published CSS. This is because we have made some adjustments to the way in which exceptional items are reported among suppliers to improve comparability.

Figures relate to the suppliers’ financial years. Five of the companies (British Gas, EDF, E.ON, npower and ScottishPower) have financial years ending in December, whereas SSE’s financial year runs from April to March.

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Chart

Javascript is required to render chart Breakdown of a gas bill.

Source: Companies’ consolidated segmental statements.

Information correct as of: August 2016

This chart provides an estimate of the proportion of different costs in the gas bill of an average domestic customer of the large suppliers in 2015. It is based on information reported by the large suppliers in their annual Consolidated Segmental Statements.  For more information, please see our page Understanding the profits of the large energy suppliers.

Policy Areas:

  • Electricity - retail markets
  • Gas - retail markets

Data Table

Breakdown of a gas bill
Annual costPercentage
Wholesale costs46.53%
Networks22.88%
Environmental and social obligation costs2.10%
Other direct costs0.62%
Operating costs16.17%
Supplier pre-tax margin6.93%
VAT4.76%

More information

Methodology

To estimate the breakdown of an average gas bill, we took the sum of each category of costs and pre-tax supply margins as reported by the suppliers for each fuel and then divided by the total number of customers for that fuel. We then added VAT at 5% and summed the implied bill components for gas and electricity together to derive an estimate of the overall costs making up a dual fuel bill.

Note that because it is based on the total costs and customer numbers reported by suppliers irrespective of their tariff type, the bill breakdown for gas will reflect a mixture of the costs of serving gas to dual fuel and single fuel customers – and the same also applies to electricity. As such, the dual fuel breakdown should be considered an approximation in that it will reflect a combination of the costs incurred in serving gas and electricity to both dual fuel and single fuel customers (which may differ if, for example, electricity-only customers consume more electricity than those customers that are also supplied with gas).

The data presented is based on the latest available Consolidated Segmental Statements (CSS). It may differ from the data that can be found in the supplier’s externally published CSS. This is because we have made some adjustments to the way in which exceptional items are reported among suppliers to improve comparability.

Figures relate to the suppliers’ financial years. Five of the companies (British Gas, EDF, E.ON, npower and ScottishPower) have financial years ending in December, whereas SSE’s financial year runs from April to March.

close

Chart

Javascript is required to render chart Breakdown of an electricity bill.

Source: Companies’ consolidated segmental statements.

Information correct as of: August 2016

This chart provides an estimate of the proportion of different costs in the electricity bill of an average domestic customer of the large suppliers. It is based on information reported by the large suppliers in their annual Consolidated Segmental Statements.  For more information, please see our page Understanding the profits of the large energy suppliers.

Policy Areas:

  • Electricity - retail markets

Data Table

Breakdown of an electricity bill
Annual costPercentage
Wholesale costs40.09%
Network costs25.16%
Environmental and social obligation costs12.99%
Other direct costs0.65%
Operating costs15.40%
Supplier pre-tax margin0.94%
VAT4.76%

More Information

Methodology

To estimate the breakdown of an average electricity bill, we took the sum of each category of costs and pre-tax supply margins as reported by the suppliers for each fuel and then divided by the total number of customers for that fuel. We then added VAT at 5% and summed the implied bill components for gas and electricity together to derive an estimate of the overall costs making up a dual fuel bill.

Note that because it is based on the total costs and customer numbers reported by suppliers irrespective of their tariff type, the bill breakdown for gas will reflect a mixture of the costs of serving gas to dual fuel and single fuel customers – and the same also applies to electricity. As such, the dual fuel breakdown should be considered an approximation in that it will reflect a combination of the costs incurred in serving gas and electricity to both dual fuel and single fuel customers (which may differ if, for example, electricity-only customers consume more electricity than those customers that are also supplied with gas).

The data presented is based on the latest available Consolidated Segmental Statements (CSS). It may differ from the data that can be found in the supplier’s externally published CSS. This is because we have made some adjustments to the way in which exceptional items are reported among suppliers to improve comparability.

Figures relate to the suppliers’ financial years. Five of the companies (British Gas, EDF, E.ON, npower and ScottishPower) have financial years ending in December, whereas SSE’s financial year runs from April to March.

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Adjustments

To ensure consistency with our guidelines on the treatment of exceptional items, we have adjusted published CSS figures in our summary analysis. The adjustments we have made mostly relate to the generation segment whereas the overall level of materiality in the retail segment remains low (below 3%). For ‘as reported’ figures please see the large suppliers’ individual published statements. Our adjustments are:

Centrica 2013

  • Reduced ‘Indirect costs’ by £11 million for ‘Electricity Generation – Renewable’ in respect of net losses on the sale and impairment of assets.
  • Reduced ‘Indirect costs’ by £10 million for ‘Gas Supply – Domestic’ in respect of impairment losses.
  • Reduced ‘Indirect costs’ by £8 million for ‘Electricity Supply – Domestic’ in respect of impairment losses.

Centrica 2014

  • Reduced ‘Other revenue’ by £16m and reduced ‘Indirect costs’ by £32.6 million for ‘Electricity Generation – Renewable’ in respect of the write off of investments and the profit on the sale of assets.
  • Increased ‘Indirect costs’ by £20.8 million for ‘Electricity Generation – Nuclear’ in respect of profit made on revaluation of contingent valuation rights.
  • Reduced ‘Indirect costs’ by £1.4 million for ‘Gas Supply – Domestic’ in respect of impairment losses.
  • Reduced ‘Indirect costs’ by £1.0 million for ‘Electricity Supply – Domestic’ in respect of impairment losses.
  • Increased ‘Depreciation and Amortisation’ by £58.0 million for ‘Generation – Nuclear’ in respect of depreciation of fair value uplifts relating to the strategic investment in Lake Acquisitions Limited. This was originally excluded from 2014 but has been added back to make it comparable with the 2015 figures which now include depreciation of these assets.

Centrica 2015

  • Increased ‘Indirect costs’ by £19.6 million for ‘Generation – Nuclear’ to exclude profit from the revaluation of contingent valuation rights.
  • Reduced ‘Indirect costs’ by £4.0 million for ‘Generation – Nuclear’ in respect of impairment losses.
  • Reduced ‘Indirect costs’ by £3.3 million for ‘Generation – Nuclear’ in respect of impairment losses.

E.ON 2013

  • Reduced ‘Depreciation and amortisation’ by £122 million for ‘Electricity Generation’ in respect of impairment write offs on the Ratcliffe power station.
  • Increased ‘Indirect costs’ by £15 million for ‘Electricity Generation’ in respect of a gain on the disposal on the London Array onshore sub-station.

E.ON 2014

  • Reduced ‘Depreciation and amortisation’ by £1,121million for ‘Generation – Conventional’ in respect of impairment write-offs on the generation portfolio.
  • Reduced ‘Indirect costs’ by £20.9 million for ‘Generation – Conventional’ in respect of restructuring costs.
  • Reduced ‘indirect costs’ by £6.7 million for ‘Gas Supply – Domestic’ in respect of restructuring costs.
  • Reduced ‘indirect costs’ by £0.3 million for ‘Gas Supply – Non-domestic’ in respect of restructuring costs.
  • Reduced ‘indirect costs’ by £10.1 million for ‘Electricity Supply – Domestic’ in respect of restructuring costs.
  • Reduced ‘indirect costs’ by £1.1 million for ‘Electricity Supply – Non-domestic’ in respect of restructuring costs.

E.ON 2015

  • Reduced ‘Indirect costs’ by £15.6 million for ‘Generation – Conventional’ in respect of restructuring costs.
  • Increased ‘Depreciation and Amortisation’ by £56.0 million for ‘Generation – Conventional’ in respect reversal of impairment charges.
  • Reduced ‘Indirect costs’ by £2.5 million for ‘Gas Supply – Domestic’ in respect of restructuring costs.
  • Reduced ‘Indirect costs’ by £0.3 million for ‘Gas Supply – Non-domestic’ in respect of restructuring costs.
  • Reduced ‘indirect costs’ by £1.7 million for ‘Electricity Supply – Domestic’ in respect of restructuring costs.
  • Reduced ‘indirect costs’ by £0.1 million for ‘Electricity Supply – Non-domestic’ in respect of restructuring costs.

EDF 2013

  • Reduced all figures for Nuclear by 20% to represent the 80% share relating to EDF.

EDF 2014

  • Reduced all figures for Nuclear by 20% to represent the 80% share relating to EDF.

EDF 2015

  • Reduced all figures for Nuclear by 20% to represent the 80% share relating to EDF.

Publications and updates

  • Published: 6th May 2016
  • Charts and data
  • 1 Associated documents
This document provides links to the segmental generation and supply statements by the large energy companies.

  • Published: 5th May 2015
  • Charts and data
  • 1 Associated documents
The latest version of the guidelines for how the Consolidated Segmental Statements (CSS) should be prepared.

  • Published: 10th Oct 2014
  • Closed: 6th Nov 2014
  • Consultations & responses
  • 14 Associated documents
We're asking for responses to our consultation on new rules we've proposed today to make information on energy company revenues, costs and profits more robust, useful and accessible.

  • Published: 10th Oct 2014
  • Charts and data, Reports & plans
  • 1 Associated documents
This document summarises the results of the six largest energy companies in 2013 and compares them across companies and over time. It also assesses the predictions of our Supply Market Indicator for 2013 against outturns.

  • Published: 26th Feb 2014
  • Decisions
  • 1 Associated documents
This letter presents the actions that we and the companies will take to make the information more robust, useful and accessible. There are a set of actions which will commence immediately.

  • Published: 25th Nov 2013
  • Factsheets
  • 1 Associated documents
To help consumers understand the revenues, costs and profits of energy suppliers, Ofgem requires the six largest suppliers to produce yearly financial statements. This factsheet focuses on the profits the companies made in 2012.

  • Published: 25th Nov 2013
  • Charts and data, Reports & plans
  • 1 Associated documents
Ofgem requires the large energy companies to publish annual statements showing separately the revenues, costs and profits of their generation and supply businesses. This document summarises the results of the six large energy companies in 2012 and...

  • Published: 31st Oct 2013
  • Closed: 6th Dec 2013
  • Consultations & responses
  • 14 Associated documents
Promoting transparency of energy company profitability is an important aspect of Ofgem’s efforts to rebuild consumer confidence in the energy market and improve competition.

  • Published: 11th Apr 2013
  • Factsheets
  • 1 Associated documents
To help make the energy market as open and clear as possible, Ofgem requires the six largest energy suppliers to publish annual financial statements showing the profits of the generation and supply parts of their businesses.