What makes up your energy bill?

For gas, it's 41% that goes towards wholesale energy costs, and for electricity, it's 29%. Even though we generate our own electricity, we still buy it (and gas) in the wholesale market. This is so we always have enough and can get the best energy prices for our customers. As with things like petrol, the cost of energy goes up and down with demand. We try to protect our customers against any sudden rises by buying energy up to three years ahead. This helps to even out prices over time.

Once we buy this energy, we need to get it to your home through the gas or electricity distribution network. For every unit of energy you use, we pay fees to keep the network’s infrastructure in good working order. Network costs also pay for power cut emergency helplines. Network costs account for 29% of your gas bill and 24% for electricity. 

As one of the main energy suppliers in the UK, we support the government in funding renewable energy and helping vulnerable customers. 2% of your gas bill goes towards funding environmental and social obligations and that's 27% of your electricity bill. Our efforts to be a more sustainable and responsible energy supplier have been recognised by a wide range of organisations.

This includes things like our UK call centres, sending your bills and reading your meters. We’re always looking for new ways to keep these costs as low as possible, such as offering MyAccount which lets you view and pay bills, send us meter readings or amend your Direct Debit details – all online. For electricity, this is 20% of your bill and for gas, this is 26%.

This is set by the UK government at 5% on all home energy bills. It’s much lower than the standard 20% which you pay for items in a shop, for example. 

This is the money we make or lose from supplying energy to our residential customers. In 2020 we made a loss of -3% from supplying gas and -4% from supplying electricity.

If you've just started providing us with meter readings then your next bill will be an accurate reflection of the energy you’ve used. If you tend to use a lot of gas and electricity, then you may have previously been paying a lower amount than you should have. So your new, accurate bill may seem expensive by comparison.

If your bills are high this could be because your home isn’t as energy efficient as it could be. Why not take a look at our tips and advice on how to make your home a haven of efficiency. Some cost nothing whereas others are more expensive. All could help you to reduce your energy bills.

Meters are usually very reliable but it is possible, although unusual, that yours may not be accurately recording your energy usage. If you think this may be the case, you can ask us to come out and check that it’s working properly.

We try and delay passing on rises in wholesale energy costs to our customers for as long as possible, but if prices continue to go up eventually we have to pass these increases on. 

Increases in bills can also be because of higher taxes and levies imposed by the government on energy companies. They include support for renewable energy schemes.

Bills need to cover repairs, replacements and upgrades to the National Grid in much the same way that rail tickets help to fund upgrades to our railway infrastructure.

Smart meters give customers greater control of their energy by showing exactly how much they’re using and what this costs in pounds and pence. Energy companies have been asked to pay for the smart meter programme by the government and many of these costs will be passed on to customers through their bills.

Energy efficiency is one of the best ways to halt rising bills but if your home is wasting more energy than it should your bills may keep on increasing. Check out our tips and advice on how to be more energy efficient at home.