Amidst the growing doom and gloom of the UK economy, EDF Energy this week announced an increase in profits for their UK business, despite sales dropping by 8% in the last year. Profits for the UK subsidiary, which handles 5.7m UK households’ energy supply, rose to €1,912 million over the year.
Compare electricity prices year on year alongside other energy sources and it’s clear why this is the case – a 15.4% increase in prices rolled out towards the end of last year meant that profits for the company increased by close to 9%. This is especially impressive given the milder winter the country saw in 2011, which meant comparatively low consumptions of electricity and gas over the year’s winter period.
Parent company EDF energy as a whole additionally trebled its profit over the year, boosted by their increased nuclear power demand and wholesale costs dropping, which have actually led to price drops going into the new year.
As the first of the “big six” energy companies that operate in the United Kingdom, EDF have
drawn the attention of consumer groups who have argued that EDF should cut their prices further to reflect the lagging UK economy.
Consumer Focus research at the close of last year suggested that a quarter of UK households were officially living in fuel poverty (i.e. spending over 10% of household income on electricity and heating) over the winter period, a surprising figure when price increases are considered.
Richard Lloyd, Executive Director for Which? Magazine, suggested that the “tide of public opinion” demanding a drop in prices and more affordable energy sources may force the energy companies into such a move. The electricity and wider energy market will await the imminent profit announcements of the other 6 suppliers with intrigue.