What costs make up your business energy tariffs?

Network costs work in a very similar way to your phone line rental, as it pays for the infrastructure required to deliver energy from the power station to your business. We pay fees (most of which are regulated by OFGEM) to use the transmission and distribution networks as well as a charge for any energy that is lost on the way.

As an energy supplier, we contribute to certain government initiatives. These schemes support energy efficiency improvements in homes and businesses, help vulnerable people and encourage take-up of renewable technology.

Our purpose at EDF is to help Britain achieve net zero. On top of these contributions we’re helping build Britain’s own wind, nuclear and solar energy supply, read more about Net Zero investments at EDF.

CCL is a government-imposed tax to encourage reduction in gas emissions and greater efficiency of energy used for business or non domestic purposes. The tax is chargeable on units (kWhs) used, and is applied only when electricity consumption exceeds 33 kWh per day during a bill period or 145kWh for gas. You’ll see CCL as a separate charge on your bill. If your usage is at or below 33kWh per day for electricity or 145kWh per day for gas, or you are supplied on our Renewable contract, CCL will not be charged. You can find out more about CCL here.

VAT is also a Government-imposed tax, which relates to the supply of goods and services. There are currently 2 rates of VAT applicable to supplies of electricity and gas – the standard rate and the reduced rate. The rate that will apply to your business depends on your usage, and will appear on your bill as a separate charge. For more detailed information about VAT and CCL, please view our helpful e-guide (PDF).

These cover the costs that we incur as your energy supplier to keep your account running smoothly. These include everything from maintaining our IT systems, paying our staff, our overheads (such as running our buildings), and marketing. This figure also includes costs such as customer debt and balancing the amount of energy we buy (costs are incurred from buying too much or too little energy). The profit margin on our prices is typically very low and for some of our tariffs is actually zero. So that we can continue to develop and improve our products and services to our customers, much of the profit margin we do make is reinvested into our business.