Costs that make up your energy bills

A breakdown of our costs

This chart shows you all the costs that make up your gas and electricity bills, including the profit we earn. The percentages are based on our Consolidated Segmental Statements published from 2010-2014, which you can find more about on our corporate website. The costs are weighted to reflect our customer base (59% electricity, 41% gas).

Buying the energy you use - 50%

The price we pay for energy goes up and down throughout the year, so we buy what we need ahead of time to keep prices low. And we've invested in places to store the gas we buy to help keep costs down.

Your electricity is generated in many different places across the country and needs to be moved around the network so everyone has electricity when they need it. This is done by the National Grid and they pass their costs onto us. This is called the Balancing Services Use of System (BSUoS).

For gas, there's something called the Reconciliation by Difference (RbD). Put simply, each year the industry estimates how much gas it thinks its customers are going to use. At the end of the year they compare this estimate to what has actually been used and the cost of any extra gas is spread across the suppliers, depending on how many customers they have.

Delivering energy to your home - 25%

We pay other network operators across the UK to get gas and electricity to you home. The money there companies make is controlled bu a formular managed by Ofgem.

Government schemes - 9%

These are schemes which help the environment and disadvantaged people. They include the Warm Home Discount, Feed-in Tariffs and the Energy Company Obligation (ECO). While we support the aims of these schemes, they do come with a cost.

Looking after you - 6%

This is for things like producing your bills, customer service and our IT systems. We always aim to keep these costs low, but we also want to put you first and give you the best possible customer service, so we have to make sure it's properly funded.

VAT - 5%

Gas and electricity is subject to Value Added Tax (VAT) which is set at 5% and is the same across all suppliers.

Our supply business profit - 5%

The profit we make lets us modernise the UKs energy system, pay our fair share of tax, employ thousands of people in the UK and give a fair return to our shareholders.