British Gas: An Angry Reaction to Record Half Year Profits

There has been an angry reaction from campaigners to British Gas reporting record half-year profits as millions of households and businesses in the UK struggle to pay their electricity and gas bills.

As they announced profits of £969 million, regulator Ofgem said the bumper results were a “one-off” due to changes.

About half of the profits – £500 million – was due to the price cap made by the regulator where the price households paid was fixed. Little wonder why campaigners are saying that the profits were “a further sign of Britain’s broker energy system”.

The big question is why the price cap was not more realistic and follow more closely the cost to generate electricity. British Gas profits demonstrate that the margin on what it cost to generate and what it cost to supply is very different.

But Ofgem said that bumper profits in the first half of the year would be a “one-off” as energy firms recoup “significant costs” from the impact of the COVID pandemic and Russia’s invasion of Ukraine and that profits would fall back significantly.

Two other suppliers, EDF Energy and Scottish Power have also reported large increases, again helped by the changes to the price cap.

Scottish Power went from a large loss in 2022 to profits of £576 million in its retail division, while EDF Energy said it’s British operations, which include nuclear and wind power generation, saw earnings jump to £1.95 billion from £740 million in 2022.