Here we explain:
- What costs make up your electricity and gas bills
- Why energy prices change
- Which products and services we're offering to help keep bills down
We'll explain what costs make up your bill and what can impact these.
It's easy to forget all the different processes and activities it takes to get the energy to your home and then how they're covered in your bill
1. Energy companies produce electricity and extract gas
2. Prices for energy on the wholesale market can go up or down, depending on global supply and demand
3. We can't control wholesale electricity and gas prices, but offer customers a range of tariffs with fixed or variable prices
4. We add the extra costs that all of the major energy suppliers face, including.....
Supporting government initiatives …
… including obligations like smart meters…
… as well as our support for vulnerable customers and customer services
5. We power your home
Wholesale costs make up the largest part of your energy bill. Other costs include network, policy and operating costs – these help us maintain the network and contribute towards a net zero future by supporting government low carbon initiatives. These pie charts show the current breakdown.
Our gas and electricity costs are determined by the prices on the wholesale markets in the UK, which in turn reflect global commodity markets. As with things like petrol, the cost of energy goes up and down with global availability and demand.
We don't own the electricity wires or gas pipes the energy flows through so we have to pay the companies that do. This money goes towards maintaining, running and upgrading the networks.
As Britain’s biggest generator of zero carbon electricity(1), we've never been busier helping cut UK carbon emissions to nothing. We also support the government in funding renewable energy and helping vulnerable customers. Our efforts to be a more sustainable and responsible energy supplier have been recognised by a wide range of organisations.
These costs cover running our call centres, sending your bills and reading your meters. We’re always looking for new ways to keep these costs as low as possible. For example, MyAccount and our mobile app which lets you view and pay bills, send us meter readings or amend your Direct Debit details – all online.
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.
Wholesale energy costs make up between 40 – 60% of your energy bill and changes in the costs tend to be the main reason for energy prices going up or down.
Unfortunately, the wholesale cost of energy has continued to increase. That's why Ofgem has announced an increase in the price cap from 1st October.
While we hate having to put prices up, sometimes this is also necessary. When wholesale prices fell in 2020, we cut Standard (Variable) tariff customers' prices by an average of £100 a year.(2)
So why are wholesale prices going up?
Increases in bills can also be because of higher taxes and levies imposed by the government on energy companies. Green levies will not be applied whilst the Government Energy Price Guarantee is in place.
Bills need to cover repairs, replacements and upgrades to the National Grid. This is similar to the way rail tickets help to fund upgrades to our railway infrastructure.
We appreciate this is a really difficult time. If you are struggling to pay please find out all the support that is available to keep on top of your payments.
Options include:
It's important now, more than ever, to stay in control of your energy. With a smart meter and our free Energy Hub, you'll easily be able to track your energy usage and see where you can save so that you can lower your bills and your carbon footprint.
Smart benefits include:
Here are the savings insulation can save you on your bills each year:
Read our tips on energy saving at home. Some of these are easy to do and completely free.
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UK Fuel Mix disclosure information, published by Government Department BEIS, recognises electricity from wind, solar and nuclear fuel produces zero carbon dioxide emissions at the point of generation.
The zero-carbon electricity purchased is supplied to the National Grid. Customers receive electricity via the National Grid, not directly from zero-carbon generators.
The below table summarises zero-carbon generation by company demonstrating EDF generating 34.3%. The data supporting the table below and the % values is sourced from a mixture of industry settlement data and the UK government renewable obligation database.
ZERO-CARBON GENERATION SUMMARY BY COMPANY | 2021 | 2021 | |
Supplier name | zero-carbon | GWh of zero-carbon electricity generation | % of overall zero-carbon electricity generation |
EDF | zero-carbon | 34,230 | 34.3% |
CENTRICA | zero-carbon | 8,248 | 8.3% |
RWE | zero-carbon | 3,958 | 4.0% |
E.on | zero-carbon | 982 | 1.0% |
SSE | zero-carbon | 4,770 | 4.8% |
ScottishPower | zero-carbon | 3,792 | 3.8% |
Drax | zero-carbon | - | - |
Orsted | zero-carbon | 7,798 | 7.8% |
EPH | zero-carbon | - | - |
Equinor | zero-carbon | 1,018 | 1.0% |
Vattenfall | zero-carbon | 1,468 | 1.5% |
Fred Olsen Renewables | zero-carbon | 698 | 0.7% |
Macquarie | zero-carbon | 2,926 | 2.9% |
Ventient Energy | zero-carbon | 482 | 0.5% |
Statkraft | zero-carbon | 303 | 0.3% |
Eneco | zero-carbon | 309 | 0.3% |
Falck Renewables | zero-carbon | 201 | 0.2% |
RES | zero-carbon | 228 | 0.2% |
SGRE | zero-carbon | 215 | 0.2% |
Greencoat | zero-carbon | 581 | 0.6% |
Community Windpower | zero-carbon | 283 | 0.3% |
OTHER | zero-carbon | 27,229 | 27.3% |
TOTAL | zero-carbon | 99,772 | 100% |
EDF reduced Direct Debit Standard Variable Tariff price by £100 during 2020, £16 on average in April 2020 and £84 on average in October 2020 (based on dual fuel customer 2,900 kWh elec and 12,000 kWh gas)
Energy Hub is accessible in MyAccount. It is available for residential smart metered customers that have both electricity and gas supplied by EDF on a single rate tariff, or those who are supplied electricity by EDF on a single rate tariff. The smart meter must also be commissioned.
Save up to £63 with Energy Hub. Savings estimated on a sample from Apr 20-Apr 22 of 1500 customers who started using Energy Hub with Energy Breakdown and logged in 5+ times between April 2021-April 2022. Costs based on Ofgem's typical annual consumption positioned against projected Standard (Variable) consumption costs of April 23-March 24. Ofgem estimates the typical household in Britain uses 2,900 kWh of electricity, 12,000 kWh of gas or 4,200 kWh for E7 annually.
Estimates based on a gas-heated detached home. Figures for England, Scotland and Wales are based on fuel prices under the Energy Price Guarantee running from April 2023 to the end of June 2023. Source: Energy Saving Trust for roof and loft insulation and cavity wall insulation.
Source: Energy Saving Trust