Where does the money go?
Electricity suppliers are only one part of Britain’s electricity system.
They buy electricity, manage customers, provide billing and customer service, meet regulatory requirements and pay many of the costs associated with delivering electricity to our homes.
Those activities cost money and suppliers need to be financially sustainable.
But after those operating costs have been accounted for, some suppliers also generate an operating profit.
Understanding that profit helps us identify where economic value is being retained within Britain’s electricity system — and how much scope may exist for reducing electricity prices.
What is EBIT?
For this analysis we use EBIT — Earnings Before Interest and Tax.
In simple terms, EBIT is the operating profit remaining after the operating costs associated with supplying electricity have been accounted for, but before interest and corporation tax.
This is important.
We are not comparing the headline profits of multinational energy groups. A company such as EDF, for example, has activities covering electricity generation, nuclear power, construction and energy supply.
Instead, we use the domestic electricity supply figures reported through Ofgem’s Consolidated Segmental Statements (CSS).
These statements separate revenues and costs including:
- wholesale electricity costs;
- network and transportation costs;
- environmental and social obligations;
- other direct costs;
- indirect operating costs; and
- depreciation and amortisation.
What remains after these operating costs is EBIT.
This gives us a much clearer picture of the operating profit being generated specifically from supplying electricity to households.
Domestic electricity EBIT in 2024
The following figures are taken from suppliers’ Consolidated Segmental Statements for financial years ending during 2024.
| Supplier | Domestic electricity EBIT |
| Octopus Energy | £396.4m |
| British Gas | £186.3m |
| EDF | £164.2m |
| ScottishPower | £145.9m |
| OVO | £48.5m |
| E.ON | £43.7m |
| Utilita | £42.8m |
| Utility Warehouse | £35.0m |
| So Energy | £14.6m |
| E (Gas & Electricity) | £10.6m |
These figures relate to domestic electricity supply, rather than the overall profits of the wider corporate groups.
Profit per electricity account
Total profit doesn’t tell the entire story.
A supplier with millions more customers would naturally be expected to generate a larger total profit.
We can therefore divide domestic electricity EBIT by the average number of domestic electricity meter points reported by each supplier.
An electricity supply point is identified by an MPAN — a Meter Point Administration Number.
This produces the following approximate operating profit per domestic electricity account:
| Supplier | EBIT per MPAN |
| Octopus Energy | £70.89 |
| ScottishPower | £58.71 |
| Utilita | £54.11 |
| EDF | £52.74 |
| Utility Warehouse | £41.78 |
| British Gas | £31.35 |
| So Energy | £22.97 |
| OVO | £13.06 |
| E (Gas & Electricity) | £11.57 |
| E.ON | £8.95 |
These numbers should not be interpreted as an additional charge appearing separately on a customer’s bill. They represent the average operating profit generated after the supplier’s reported operating costs.
Nor does a higher figure necessarily mean that an individual household on that supplier pays a higher tariff. Suppliers have different customer mixes, tariffs, hedging strategies and cost structures.
A real example: EDF
EDF’s 2024 Consolidated Segmental Statement illustrates how EBIT is calculated.
For domestic electricity supply EDF reported approximately:
Revenue: £3.037bn
From this it reported:
- £1.065bn direct fuel costs;
- £649m transportation costs;
- £679m environmental and social obligation costs;
- £44.5m other direct costs; and
- £424m indirect costs.
Total operating costs were approximately £2.862bn.
That left EBITDA of £174.9m.
After £10.7m of depreciation and amortisation, EDF reported domestic electricity EBIT of £164.2m.
EDF reported approximately 3.113 million domestic electricity meter points, equivalent to roughly £52.74 EBIT per meter point.
This example demonstrates why EBIT is useful for this analysis: wholesale electricity, networks, environmental obligations and the supplier’s indirect operating costs have already been recognised before the reported EBIT figure is reached.
Profit is not inherently a problem
Policy Seed is not proposing that electricity suppliers should operate without profit.
Suppliers need to remain financially viable. They need working capital, must manage significant wholesale-market risks and need to invest in technology, customer service and new products.
Britain has also experienced the consequences of inadequately capitalised suppliers failing.
The relevant policy question is therefore not:
Should electricity suppliers make a profit?
It is:
How much operating profit is necessary to maintain a competitive, innovative and financially resilient electricity retail market?
That distinction matters.
Economic value within the electricity bill
Every pound of operating profit ultimately forms part of the economics of supplying electricity.
Individually, supplier margins may appear relatively small compared with wholesale electricity and network costs.
Across tens of millions of households, however, even relatively modest margins can represent hundreds of millions of pounds.
This makes electricity retail one layer of a much larger question.
Policy Seed is examining where economic value is retained throughout Britain’s electricity system, including:
- electricity suppliers;
- distribution networks;
- transmission networks;
- electricity generators;
- renewable support mechanisms;
- Contracts for Difference;
- the Capacity Market;
- balancing and system services; and
- other parts of the electricity market.
The objective is not simply to identify companies making profits.
It is to understand how much economic value is being extracted at each stage, whether that return is proportionate to the service and risk involved, and whether some of that value could instead be used to reduce the price of electricity.
Why this matters
Britain needs considerably more electrification.
Millions of homes could eventually move from gas boilers to heat pumps. Transport is moving from petrol and diesel towards electricity. Businesses will increasingly electrify industrial processes.
That transition becomes considerably easier if electricity is affordable.
Reducing electricity prices therefore requires looking beyond any single component of the bill.
Supplier EBIT is one part of that investigation.
The next question is what happens to the money before it reaches the supplier — and where else economic value is being retained throughout the electricity system.
Methodology and important caveats
Figures on this page use domestic electricity EBIT reported in suppliers’ Consolidated Segmental Statements.
We deliberately do not use overall corporate profits because large energy groups can own generation, trading, services and international businesses that have little to do with supplying electricity to a British household.
Financial years also differ between suppliers. “2024” therefore means a financial year ending during 2024, rather than every company covering an identical January–December period.
EBIT per MPAN is calculated by dividing reported domestic electricity EBIT by the supplier’s reported average domestic electricity meter points. Figures are rounded.
The data should therefore be used to understand the scale and distribution of operating profitability rather than as an exact measure of the profit attributable to an individual household.
Sources
Ofgem — Energy suppliers’ profit and loss statements / Consolidated Segmental Statements
Contains the individual 2024 CSS filings for all suppliers used in this analysis.
Octopus Energy — Consolidated Segmental Statement, year ended 30 April 2024
https://octopus.energy/documents/4367/Octopus_Energy_CSS_-_FY23_24_1.pdf
British Gas Trading — Consolidated Segmental Statement, year ended 31 December 2024
Available from the Ofgem repository above. Ofgem specifically lists the British Gas 31 December 2024 filing.
EDF UK Group — Consolidated Segmental Statement, year ended 31 December 2024
https://www.edfenergy.com/sites/default/files/2025-12/CSS-2024-Submission-Final.pdf
ScottishPower Energy Retail — Consolidated Segmental Statement, year ended 31 December 2024
Available from the Ofgem repository above.
OVO Group — Consolidated Segmental Statement, year ended 31 December 2024
Available from the Ofgem repository above.
E.ON SE Group UK — Consolidated Segmental Statement, year ended 31 December 2024
Utilita Energy — Consolidated Segmental Statement, year ended 31 March 2024
Utility Warehouse — Consolidated Segmental Statements
https://uw.co.uk/legal/energy-information/consolidated-segmental-statements
Select the 2024 statement.
So Energy — Consolidated Segmental Statement, year ended 31 December 2024
Available from the Ofgem repository above.
E Gas and Electricity — Consolidated Segmental Statement, year ended 31 March 2024
Available from the Ofgem repository above.
For the methodology explanation, I’d also include:
Ofgem — Energy companies’ Consolidated Segmental Statements (CSS)