The UK’s large electricity networks return a third of their revenue as profit, claims the Energy and Climate Intelligence Unit (ECIU), and cumulatively at least half – over £5 billion – has been paid in dividends to the companies’ overseas owners. That represented 15.5%. of revenues. It said, “While no-one would question the right of a private company to make a profit and pay a dividend, and while there are undeniable benefits from foreign ownership including access to capital, it could be argued that Britain’s DNOs could be investing far more than they are in hastening the transition to a flexible smart grid.”
The ECIU’s report, “Monopoly money: How the UK’s electricity distribution network operators are posting big profits“, examined the period 2010-2015.
The industry’s lobby group, the Energy Networks Association, said it “rejected outright” ECIU’s analysis. It claimed ECIU “uses outdated and incomplete data with no detail on how conclusions are reached other than brief reference to what is a fundamentally flawed and incorrect methodology. The report is highly misleading, claiming revenue as profits without taking into account the value of the assets themselves and the £15.3 billion invested by companies between 2010 and 2015.”
Download the report here
Further reading
Citizens Advice criticises Ofgem over “unjustified” energy network profits
DNOs could face penalty over performance on large connections
Independent networks ‘an opportunity for innovation’
‘National debate’ needed as some consumers will lose gas option