14th February 2026
It's true that a significant share of energy bills goes to profits for energy companies and network operators, and a lot of that money doesn't stay in the UK economy.
An analysis by trade union Unite reported that UK energy companies made around £30 billion in profits in 2024, with profit margins "around three times the UK national average." Much of this flowed to shareholders — including international investment firms and foreign states — rather than being reinvested into infrastructure or lowering bills.
Around half of the "Big Six" energy suppliers in the UK are owned by foreign companies — for example EDF Energy is owned by the French state, and other suppliers have German or Spanish parent firms.
Because of this structure, bill payers fund costs that ultimately become dividends or profits sent overseas into global investor accounts or government treasuries. This creates a perception — supported by some data — that retail energy bills help finance shareholder returns rather than being used exclusively to run and upgrade UK energy systems.
Does Foreign Ownership = Wealth Extraction?
There are two separate issues people often conflate:
Where profits end up: It’s true that foreign-owned firms profit from UK energy sales and pay dividends to investors abroad.
How that affects price setting: Foreign ownership does not automatically mean energy bills are set to benefit those holders at the expense of UK consumers. Retail prices are regulated by law and by the energy regulator Ofgem.
However, critics argue that the structure of privatisation and investment in the UK, which allows huge international capital to own parts of the energy system, does mean households indirectly fund foreign profits.
This concern is often linked to broader debates about privatisation in the UK and how essential services should be owned or regulated.
What Is the Energy Price Cap, and Is It a “Lie”?
The energy price cap in the UK sets a maximum price suppliers can charge households per unit of gas or electricity.
Important clarifications:
The cap does not control total bills — it caps unit costs, not standing charges or non-energy costs.
It is reviewed periodically (usually every three months) and adjusts based on wholesale energy costs, which have been volatile.
So is the price cap a “lie”? No — it is a real regulatory mechanism designed to limit how high default tariff prices can go. But it has limitations:
It protects households from extreme overcharging based on unfair market power.
It does not guarantee low bills — because it reflects actual market costs plus supplier costs and allowed margins.
It does not stop bills from being high when wholesale energy prices are high.
In fact, analysis shows that even with the cap, wholesale costs remain significantly above historical levels, adding hundreds of pounds each year to household bills compared with pre-crisis prices — currently more than £300 extra per year per household.
Does the Price Cap Remove Cheap Deals?
Some commentators and industry research suggest that the price cap has unintended consequences:
A KPMG survey reported that nearly half (48 %) of bill payers believed the cap reduced the number of available deals, making choice and switching less effective for consumers.
When the cap becomes the standard price rather than a maximum, it can reduce supplier incentive to offer deals below the cap — potentially leading to less competitive pricing.
Why Are Energy Bills Still High?
Multiple factors drive high bills in the UK:
Wholesale Gas Prices
The UK is heavily exposed to global gas markets. Even with renewable capacity growing, electricity prices are still closely tied to gas prices, which have been unusually high since the post-Ukraine invasion period.
Network and Policy Costs
Bills include charges for maintaining the grid and levies to support renewable energy and social programmes. These are not directly controlled by the price cap.
Profit and Investment Structures
While Ofgem allows suppliers to recover justified costs, the overall profitability of the energy sector remains relatively high compared with other parts of the economy — reflecting risk premiums and capital structures.
Is the Cap Misleading?
It’s fair to say the energy price cap does not do what many people think it does:
It doesn’t guarantee affordable bills.
It doesn’t stop profit extraction by suppliers or infrastructure owners with profitable stakes.
It doesn’t change wholesale cost exposure.
But it is not a sham — it remains one of the few tools designed to protect consumers from unchecked retail price hikes.
What Could Improve the System? Not Just Complaints
If the goal is genuinely lower bills and more public benefit from energy spending, there are several policy routes being pursued or discussed:
1. Increase Domestic Control of Energy Assets
The UK has recently created entities like the National Energy System Operator (NESO), a publicly owned system operator, to improve planning and balance supply and demand.
2. Greater Public Ownership
Some organisations and unions advocate for partial or full public ownership of transmission, distribution or generation, arguing that profits would then stay in the UK rather than going to foreign shareholders.
3. Market Reform
Improving competition and pricing, especially for low-usage households, can help consumers take advantage of lower prices when wholesale costs fall.
4. Energy Efficiency Programmes
Reducing demand through insulation and efficiency reduces total bills regardless of price.
Energy companies do make large profits, some of which flow to foreign owners.
Foreign ownership doesn’t logically force high bills on its own, but it does shape where profits go.
The energy price cap is real but limited — it protects against extreme prices, but does not guarantee low bills or remove high costs caused by wholesale markets and other factors.
So it’s not a “complete lie,” but it isn’t sufficient on its own to deliver affordable energy or stop wealth flowing out of the UK via energy profits.