What makes up your energy bill?

Have you ever wondered what contributes to the cost of your energy bill?

Maybe you think it's as simple as the wholesale cost of gas and/or electricty plus some mark-up? But actually, there's a lot more to it.

While the majority of the bill is made up of the wholesale cost of energy as you would expect, there are also network costs, operating costs and more.

pie chart demonstrating the composition of a dual fuel energy bill

Whole costs

The amount an energy supplier pays for the gas and electric they then sell to you.

Network costs

The costs associated with building, maintaining and operating gas pipes and electricity wires run by the network companies who transport energy to your home.

Operating costs

These are the costs associated with running an energy business and include things such as metering and billing.

Environmental and social costs

These are the cost of government programmes to save energy, reduce emissions and encourage the take up of renewable energy.

These also include the cost of social programmes such as the Warm Home Discount.

pie chart demonstrating the composition of single fuel energy bills

Data published by Ofgem, 28 January 2021, https://www.ofgem.gov.uk/publications-and-updates/infographic-bills-prices-and-profits

Category: Energy
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