Nearly a quarter of the average UK energy bill went to company profits last year, according to new analysis highlighting the cost of privatisation. The study, by the Common Wealth thinktank, found that £416 of the typical £1,719 annual bill was taken as pre-tax profits by major electricity generators, networks and household suppliers in 2024.
The research, part of the wider Who Owns Britain project, calculates that shareholders of Britain's privatised energy companies have received at least £70.7bn in dividend payouts between 2010 and 2025. Mathew Lawrence, director of Common Wealth, said the public was paying a high price for the "privatisation premium". "They are lumped with higher energy bills that fund billions of pounds of shareholder payouts," he said.
The analysis also found that energy networks, which distribute gas and electricity, had profit margins of 55% between 2020 and 2024, compared with a FTSE 350 average of 14%. Chris Hayes, chief economist at Common Wealth, said the system was unfit for the challenges of the climate emergency and cost of living crisis, with networks underinvesting and generators capturing windfall profits. He called for public investment and vertical reintegration.
The report argues investment in the energy system was twice as high relative to GDP under public ownership than in the privatised era, which saw the Tories sell off the sector in the 1980s and 1990s. While supporters claimed privatisation would increase efficiency and attract investment, the report found that investment has stalled and bills have risen, with tens of billions extracted from consumers.
Sandy Hager, from the University of London, said energy was "the lifeblood of our economy" and that the current model was indefensible. The study shows that the nine largest generators and the networks made £17.8bn in operating profits in 2023, with £8.02bn spent on dividends, buybacks and interest payments, equivalent to 9% of the typical bill that year.
