As the energy crisis continues, Tariff Watch is a new series of quarterly reports from the Warm This Winter coalition, produced in partnership with Future Energy Associates (FEA) revealing the secret data behind Britain's broken energy system.
Millions of British households are still struggling to pay their energy bills, yet Britain’s broken energy system allows energy suppliers to increase the profit they make on each customer the higher energy prices rise.
The Warm This Winter campaign commissioned the Tariff Watch report to reveal how much profit energy companies are making from British households and which regions are being hit hardest by variations in costs.
With the latest Ofgem price cap change on 1st April, the costs households pay per unit of energy decreased slightly - though still remaining almost double what they were in 2021 - while standing charges rose. However, our latest report has revealed that the majority of households on fixed energy tariffs are now paying more than the current price cap, but extortionate exit fees are trapping them on these worse deals. The report also identified the most expensive fixed energy tariffs on offer, and those worth considering switching to.
In a special additional release, this new Tariff Watch report reveals how hidden fees are being hiked on our energy bills and boosting the profits of private investment funds around the world. This means money is being lifted straight from consumer pockets and put in the pockets of investors, instead of being invested back into our energy system.
Following this month's rise in the Ofgem price cap, our latest Tariff Watch report reveals that freezing households are being hit by 14 obscure energy charges that are keeping electricity bills at record levels. These costs are passed onto the consumer via Electricity Standing Charges, which have surged 119% since winter 2020/21 due to the combined impact of these covert costs, and account for £194 a year for every household. Separately, the report reveals rules which allow Distribution Network Operators (DNOs) who maintain and upgrade the grid to keep money charged to consumers but not spent, as they underspend on plans to upgrade the electricity network.
These concerning findings point to the need for a review into these charges, and highlight how our current energy system is actively hampering Britain's access to cheaper, renewable energy through the failure to invest in the grid. Find out more below.
While millions of Brits are facing another winter of high bills, the second Warm This Winter Tariff Watch report reveals that energy firms are spending £242 per customer on operating costs. These costs make up 13% of customers’ bills, with energy firms spending almost as much on marketing, which includes sponsoring football teams, event venues and creating TV adverts (c.11% of operating costs), as they do on operating customer contact centres (c.12% of operating costs).
It’s galling to think that our energy bills are so high because energy firms spend as much on sponsoring Premier League football teams and expensive TV adverts as they do on customer service. But while households suffer, the Government sits on its hands and refuses to introduce tariff reforms which could bring down bills and help people stay warm this winter. Find out more below.
Our inaugural report reveals that household energy suppliers - the companies which provide consumers with gas and electricity - could rack up £1.74bn in profits over the next 12 months from customers’ energy bills. To put this figure into context - that’s enough money to completely wipe out GB energy debt through a “Help to Repay” scheme and still leave suppliers in profit to the tune of half a billion pounds. What’s more, this is in addition to any extra profit made from Ofgem’s Covid and Ukraine allowances which caused British Gas' recent record numbers.
Britain’s energy system is broken. Without fundamental overhaul of the energy grid and energy tariffs, households will continue to lose out while suppliers will profit. In the meantime, the experts at FEA have some suggestions around finding the best deal. Find out more below.
