1 00:00:12,075 --> 00:00:16,195 Our new Prime Minister is facing a national crisis. 2 00:00:16,195 --> 00:00:18,195 It's going to be an absolutely catastrophic winter 3 00:00:18,195 --> 00:00:21,715 unless the government steps in. 4 00:00:21,715 --> 00:00:25,515 What will Liz Truss do about soaring energy bills? 5 00:00:25,515 --> 00:00:27,715 How can you justify such a massive hike? 6 00:00:27,715 --> 00:00:29,155 How can you justify £8,000? 7 00:00:29,155 --> 00:00:33,035 It's ridiculous. 8 00:00:33,035 --> 00:00:38,195 Tonight we investigate companies cashing in. 9 00:00:39,395 --> 00:00:42,315 The biggest winners in these crises are the oil and gas producers. 10 00:00:42,315 --> 00:00:45,035 No question about that. 11 00:00:45,035 --> 00:00:48,515 And the extraordinary profits being made. 12 00:00:48,515 --> 00:00:50,915 This is a moment of real crisis, I think, 13 00:00:50,915 --> 00:00:55,035 where we can no longer justify letting them get away with that. 14 00:00:55,035 --> 00:01:00,075 While vulnerable families are pushed to the brink... 15 00:01:00,075 --> 00:01:03,715 They're raising their prices and they just 16 00:01:03,715 --> 00:01:05,955 don't understand that for us electricity is the difference 17 00:01:05,955 --> 00:01:10,155 between life and death. 18 00:01:10,155 --> 00:01:10,315 It 19 00:01:10,315 --> 00:01:10,595 It is 20 00:01:10,595 --> 00:01:10,835 It is an 21 00:01:10,835 --> 00:01:11,035 It is an essential 22 00:01:11,035 --> 00:01:11,195 It is an essential need 23 00:01:11,195 --> 00:01:11,395 It is an essential need for 24 00:01:11,395 --> 00:01:11,635 It is an essential need for our 25 00:01:11,635 --> 00:01:11,835 It is an essential need for our family 26 00:01:11,835 --> 00:01:11,995 It is an essential need for our family and 27 00:01:11,995 --> 00:01:12,235 It is an essential need for our family and our 28 00:01:12,235 --> 00:01:13,115 It is an essential need for our family and our child. 29 00:01:33,275 --> 00:01:34,475 One, two, three four five... 30 00:01:34,475 --> 00:01:36,435 Lauren lives in Birmingham with her partner Sam 31 00:01:36,435 --> 00:01:41,235 and their two-year-old son Arlo. 32 00:01:41,235 --> 00:01:46,395 She's a primary school teacher, and he's an illustrator. 33 00:01:47,595 --> 00:01:51,435 They take home just above the average household income of £31,000. 34 00:01:51,435 --> 00:01:56,155 But that's no longer enough. 35 00:01:56,155 --> 00:01:57,555 Petrol has gone up a lot. 36 00:01:57,555 --> 00:02:00,435 We are spending a lot more to get and from work now. 37 00:02:00,435 --> 00:02:01,595 Nursery fees have gone up. 38 00:02:01,595 --> 00:02:04,435 Our rent has gone up. 39 00:02:04,435 --> 00:02:07,515 And our gas and electric has gone up probably the most, hasn't it? 40 00:02:07,515 --> 00:02:10,555 Yes. 41 00:02:10,555 --> 00:02:13,195 So, a year ago we were paying about £100 a month, 42 00:02:13,195 --> 00:02:16,075 and now it is £250 a month for our gas and electric. 43 00:02:16,075 --> 00:02:21,315 So, it's really hiked up. 44 00:02:28,915 --> 00:02:31,835 It's at the point now where we feel like we are kind 45 00:02:31,835 --> 00:02:35,115 of scraping at the barrel - we are being as sensible as we can. 46 00:02:35,115 --> 00:02:37,035 But it is just getting tighter and tighter. 47 00:02:37,035 --> 00:02:38,755 Heart-breaking, isn't it? 48 00:02:38,755 --> 00:02:40,835 We work every day and then at the end 49 00:02:40,835 --> 00:02:45,075 of the month it all disappears. 50 00:02:49,155 --> 00:02:53,195 UK gas and electricity prices have already doubled in the past year. 51 00:02:53,195 --> 00:02:58,475 They're expected to rise to more than £5,000 a year in January. 52 00:02:59,715 --> 00:03:02,435 Could you afford that? 53 00:03:02,435 --> 00:03:04,355 I don't think we will be able to. 54 00:03:04,355 --> 00:03:06,595 No. 55 00:03:06,595 --> 00:03:10,675 We are already at our limit with the energy bill 56 00:03:10,675 --> 00:03:12,875 at the minute and we can't afford any more. 57 00:03:12,875 --> 00:03:14,835 And to think about it going up again, 58 00:03:14,835 --> 00:03:17,195 you just feel really helpless. 59 00:03:17,195 --> 00:03:22,435 The UK is the hardest-hit country in western Europe. 60 00:03:22,475 --> 00:03:24,155 More than half of households are expected 61 00:03:24,155 --> 00:03:29,355 to be pushed into fuel poverty. 62 00:03:30,075 --> 00:03:35,275 I think we're entering into a real national emergency now. 63 00:03:36,275 --> 00:03:38,395 We've already seen around seven million people not able 64 00:03:38,395 --> 00:03:40,755 to afford all the essentials, so people who are having 65 00:03:40,755 --> 00:03:42,955 to skip meals, not be able to have showers, 66 00:03:42,955 --> 00:03:44,635 afford toiletries, can't heat their homes properly. 67 00:03:44,635 --> 00:03:46,715 It's going to be an absolutely catastrophic winter 68 00:03:46,715 --> 00:03:51,955 unless the government steps in. 69 00:03:58,635 --> 00:04:01,155 The crisis started with increased demand for energy 70 00:04:01,155 --> 00:04:06,435 as the world came out of lockdown. 71 00:04:06,755 --> 00:04:10,155 Then Russia invaded Ukraine, and the gas price spiralled further. 72 00:04:10,155 --> 00:04:13,195 Prices had already increased before the war. 73 00:04:13,195 --> 00:04:15,315 And then when Russia invaded Ukraine in February 2022, 74 00:04:15,315 --> 00:04:19,555 prices went up even more. 75 00:04:19,555 --> 00:04:22,195 So it's an unprecedented sequence of events that starts from Covid 76 00:04:22,195 --> 00:04:27,435 and ends with the war in Ukraine. 77 00:04:31,115 --> 00:04:32,995 The impact of soaring gas and electricity prices 78 00:04:32,995 --> 00:04:38,235 will be felt by every one of us. 79 00:04:39,235 --> 00:04:42,155 This year, UK households are expected to pay over 80 00:04:42,155 --> 00:04:45,675 £100 billion more for their energy than they did last year. 81 00:04:45,675 --> 00:04:48,595 It's an incredible sum of money. 82 00:04:48,595 --> 00:04:53,755 So where's all that extra cash going? 83 00:04:56,075 --> 00:05:01,275 Unlike much of Europe, the UK isn't dependent on Russian gas. 84 00:05:03,155 --> 00:05:08,275 Our biggest foreign supplier is Norway. 85 00:05:09,035 --> 00:05:12,355 We paid the Norwegians an extra £8 billion 86 00:05:12,355 --> 00:05:16,195 in the first six months of this year. 87 00:05:16,195 --> 00:05:21,355 And the cost of gas has soared since then. 88 00:05:22,795 --> 00:05:26,435 Norway's state-owned energy company tweeted its financial results 89 00:05:26,435 --> 00:05:31,635 with emojis of bags of cash. 90 00:05:32,635 --> 00:05:35,315 The Norwegians are already the equivalent of the Saudi Arabian 91 00:05:35,315 --> 00:05:40,595 oil sheikhs, wearing jeans. 92 00:05:41,235 --> 00:05:43,035 In simple terms, 93 00:05:43,035 --> 00:05:46,195 Norway provides somewhere in the region of 25% to 30% of our gas. 94 00:05:46,195 --> 00:05:49,075 And the wholesale price of that gas has gone up five times 95 00:05:49,075 --> 00:05:54,235 from its average level. 96 00:05:56,755 --> 00:05:59,075 So simple arithmetic says that, that, er, the Norwegians 97 00:05:59,075 --> 00:06:00,995 are making five times as much revenue from, 98 00:06:00,995 --> 00:06:03,515 GB consumers as they might have been two or three years ago. 99 00:06:09,835 --> 00:06:14,675 British oil and gas companies are cashing in too. 100 00:06:14,675 --> 00:06:19,875 But they're not owned by the state. 101 00:06:20,835 --> 00:06:26,035 So shareholders, including pension funds, are getting big payouts. 102 00:06:28,315 --> 00:06:33,595 Between April and June this year, BP made nearly £7 billion in profit. 103 00:06:35,675 --> 00:06:38,555 Its rival, Shell, did even better with a profit of £9.4 billion 104 00:06:38,555 --> 00:06:40,515 in just three months. 105 00:06:40,515 --> 00:06:45,795 That's more than a £100 million a day. 106 00:06:49,035 --> 00:06:52,155 The biggest winners in these crises are the oil and gas producers. 107 00:06:52,155 --> 00:06:57,355 No question about that. 108 00:06:58,115 --> 00:07:01,915 Any big energy price crisis results in a massive transfer 109 00:07:01,915 --> 00:07:05,795 from the consumers to the producers of those fossil fuels. 110 00:07:05,795 --> 00:07:08,475 By and large you are talking about the big companies getting 111 00:07:08,475 --> 00:07:11,595 a lot richer on the back of people who have to pay for 112 00:07:11,595 --> 00:07:12,795 the energy they need. 113 00:07:12,795 --> 00:07:18,075 And it's kind of as simple as that at one level. 114 00:07:18,675 --> 00:07:22,835 Over the past year, BP has returned almost £10 billion to shareholders 115 00:07:22,835 --> 00:07:28,035 in dividends and share buy-backs. 116 00:07:28,115 --> 00:07:32,075 Its boss has described the company as a cash machine. 117 00:07:32,075 --> 00:07:35,635 Today we have high oil prices the company as a cash machine. 118 00:07:35,635 --> 00:07:38,555 and a few things happen when the price of oil is high. 119 00:07:38,555 --> 00:07:41,875 Number one, we do make more profits, as you have seen this morning - 120 00:07:41,875 --> 00:07:46,675 that we can use to reward our shareholders. 121 00:07:46,675 --> 00:07:51,955 And Shell has returned £15 billion to shareholders in the last year. 122 00:07:52,235 --> 00:07:54,635 On the back of robust operational performance, 123 00:07:54,635 --> 00:07:58,515 our strategy is delivering for our shareholders. 124 00:08:00,315 --> 00:08:02,995 Both Shell and BP say they will be providing financial support 125 00:08:02,995 --> 00:08:08,115 for people struggling this winter. 126 00:08:09,155 --> 00:08:11,275 And that they are investing billions in the UK 127 00:08:11,275 --> 00:08:16,595 to deliver lower carbon energy. 128 00:08:22,435 --> 00:08:25,075 But the crisis in the energy market has delivered a windfall 129 00:08:25,075 --> 00:08:30,275 for the energy producers. 130 00:08:33,435 --> 00:08:37,395 BP and Shell have operations all over the world but some 131 00:08:37,395 --> 00:08:42,635 of their huge profits come from oil and gas here in the North Sea. 132 00:08:43,395 --> 00:08:48,675 The North Sea still provides half of the UK's gas. 133 00:08:49,395 --> 00:08:51,915 Much of it comes ashore here 134 00:08:51,915 --> 00:08:57,235 at Shell's Bacton gas plant in Norfolk. 135 00:08:59,475 --> 00:09:00,675 So what happens down here? 136 00:09:00,675 --> 00:09:03,075 There's eight pipelines going into Bacton from the gas rigs 137 00:09:03,075 --> 00:09:05,195 in the North Sea. Um, it's a 24-hour operation. 138 00:09:05,195 --> 00:09:07,355 It's a major employer around this area, as well. 139 00:09:07,355 --> 00:09:10,035 They take the gas in there and then pipe it off 140 00:09:10,035 --> 00:09:12,235 to other places. 141 00:09:12,235 --> 00:09:16,155 In May, the government announced a windfall tax - 142 00:09:16,155 --> 00:09:21,395 an additional 25% on profits from North sea oil and gas. 143 00:09:24,635 --> 00:09:27,075 It is possible to both tax extraordinary profits fairly 144 00:09:27,075 --> 00:09:31,675 and incentivise investment. 145 00:09:31,675 --> 00:09:36,915 So we will introduce a temporary targeted energy profits levy. 146 00:09:39,275 --> 00:09:42,315 The government says the new tax will increase investment and raise 147 00:09:42,315 --> 00:09:47,395 £5 billion over the next year. 148 00:09:47,435 --> 00:09:52,275 But critics say the tax isn't all it seems. 149 00:09:56,595 --> 00:09:59,995 Dan Neidle is a Labour-supporting lawyer. 150 00:09:59,995 --> 00:10:04,955 He used to be head of tax at one of the City's biggest legal firms. 151 00:10:07,995 --> 00:10:11,115 So, this tax, it's often called a windfall tax. 152 00:10:11,115 --> 00:10:13,595 It's not strictly a windfall tax because it's not retrospective. 153 00:10:13,595 --> 00:10:17,115 It's a tax that applies going forward. 154 00:10:17,115 --> 00:10:19,075 So most of the massive profits applies going forward. 155 00:10:19,075 --> 00:10:21,235 from the six months of this year aren't touched. 156 00:10:21,235 --> 00:10:24,995 Correct. 157 00:10:24,995 --> 00:10:26,995 The windfall tax also has an investment allowance 158 00:10:26,995 --> 00:10:28,395 which is intended to encourage investment. 159 00:10:28,395 --> 00:10:31,515 The problem is the time horizon of the windfall tax is so limited, 160 00:10:31,515 --> 00:10:33,875 it's very unlikely it will encourage any investment. 161 00:10:33,875 --> 00:10:37,795 So all the investment allowance is doing is throwing money away. 162 00:10:37,795 --> 00:10:40,475 It's a dead weight cost and we can estimate reasonably conservatively 163 00:10:40,475 --> 00:10:45,715 that the minimum cost of that is £3.2 billion. 164 00:10:47,315 --> 00:10:50,955 It is impossible to justify oil and gas companies 165 00:10:50,955 --> 00:10:53,155 making massive profits, while households 166 00:10:53,155 --> 00:10:58,355 all across the country are looking at energy bills that they can't 167 00:10:58,435 --> 00:11:03,715 afford, so, there is clearly a need to help offset some of that 168 00:11:05,395 --> 00:11:08,395 real suffering and frankly, despair, that families are going to be 169 00:11:08,395 --> 00:11:11,555 pushed into as a result of exactly the same dynamics that are causing 170 00:11:11,555 --> 00:11:16,755 unexpected and indeed record profits for the oil and gas industry. 171 00:11:27,595 --> 00:11:29,035 Customers don't buy gas and electricity 172 00:11:29,035 --> 00:11:32,595 from the likes of BP and Shell. 173 00:11:32,595 --> 00:11:37,915 They pay energy suppliers who have bought it on the open market. 174 00:11:41,675 --> 00:11:46,875 Some suppliers have been accused of cashing in too. 175 00:11:48,235 --> 00:11:51,875 It's quite a lot, isn't it? 176 00:11:51,875 --> 00:11:57,155 They are saying there that prices are going to rise by 12%. 177 00:11:57,995 --> 00:12:00,835 In south Wales, Liz Bergelin and her husband Pete use British Gas. 178 00:12:00,835 --> 00:12:04,915 She's a childminder and he's a lecturer. 179 00:12:04,915 --> 00:12:05,115 It 180 00:12:05,115 --> 00:12:05,315 It is 181 00:12:05,315 --> 00:12:05,515 It is going 182 00:12:05,515 --> 00:12:05,715 It is going to 183 00:12:05,715 --> 00:12:05,915 It is going to be 184 00:12:05,915 --> 00:12:06,115 It is going to be a 185 00:12:06,115 --> 00:12:06,315 It is going to be a tough 186 00:12:06,315 --> 00:12:09,595 It is going to be a tough time. 187 00:12:09,595 --> 00:12:11,355 They earn around the average household income. 188 00:12:11,355 --> 00:12:16,475 And they're worried about their energy bill. 189 00:12:16,675 --> 00:12:19,555 Every month you are looking, are we going to have enough money 190 00:12:19,555 --> 00:12:22,715 to pay all the bills at the end of the day and keep 191 00:12:22,715 --> 00:12:25,635 a roof over our heads? 192 00:12:25,635 --> 00:12:27,275 And if it increases by £100, £200, 193 00:12:27,275 --> 00:12:29,675 then where are we going to find those extra pounds? 194 00:12:29,675 --> 00:12:30,715 It's a lot. 195 00:12:30,715 --> 00:12:33,915 So what are you going to do if you can't find the extra? 196 00:12:33,915 --> 00:12:36,275 I really don't know how we are going to manage, 197 00:12:36,275 --> 00:12:37,355 to be fair. 198 00:12:37,355 --> 00:12:41,475 It's going to be a difficult time, definitely. 199 00:12:41,475 --> 00:12:44,395 Liz would like to find a fixed-rate energy deal 200 00:12:44,395 --> 00:12:48,995 to protect her against further price rises. 201 00:12:48,995 --> 00:12:53,435 So this came through at the beginning of August. 202 00:12:53,435 --> 00:12:55,875 But she says the deals on offer from energy suppliers 203 00:12:55,875 --> 00:13:00,755 are far too expensive. 204 00:13:00,755 --> 00:13:04,355 So I had an email from British Gas which basically gave me 205 00:13:04,355 --> 00:13:09,515 the reassurance of being able to come into a fixed rate tariff. 206 00:13:10,995 --> 00:13:14,355 So this is what we are paying, about £3,000, 207 00:13:14,355 --> 00:13:16,395 so which is about £250 a month, about £3,000, 208 00:13:16,395 --> 00:13:19,835 But I could be reassured 209 00:13:19,835 --> 00:13:23,115 and fix my prices in for just over £8000 a year. 210 00:13:23,115 --> 00:13:24,195 That's astronomical! 211 00:13:24,195 --> 00:13:26,155 What did you think when you opened that? 212 00:13:26,155 --> 00:13:26,555 I was really angry. 213 00:13:27,795 --> 00:13:32,115 How can you justify such a massive hike in your fixed rate tariff? 214 00:13:32,115 --> 00:13:33,275 How can you justify £8,000? 215 00:13:33,275 --> 00:13:38,555 It's ridiculous. 216 00:13:39,435 --> 00:13:42,195 Centrica, the company that owns British Gas, 217 00:13:42,195 --> 00:13:44,235 says fixed rate offers are "based on projections 218 00:13:44,235 --> 00:13:49,315 as to where prices will go". 219 00:13:49,355 --> 00:13:51,595 It says it will use 10% of British Gas profits 220 00:13:51,595 --> 00:13:55,835 to "help customers who need it the most". 221 00:13:55,835 --> 00:13:58,675 And that it's "making long-term investments 222 00:13:58,675 --> 00:14:03,955 "to support the UK's energy security and resilience". 223 00:14:10,715 --> 00:14:13,555 There is a limit on the amount energy suppliers in Great Britain 224 00:14:13,555 --> 00:14:18,555 can charge customers. 225 00:14:18,635 --> 00:14:21,195 The regulator Ofgem sets a maximum price for each unit 226 00:14:21,195 --> 00:14:23,915 of gas and electricity. 227 00:14:23,915 --> 00:14:27,475 But the price cap keeps going up. 228 00:14:27,475 --> 00:14:30,555 Ofgem says it has to allow energy suppliers to put up their bills 229 00:14:30,555 --> 00:14:32,355 in line with the rising cost of gas. 230 00:14:32,355 --> 00:14:34,995 If it doesn't raise the price cap, suppliers will go bust. 231 00:14:34,995 --> 00:14:38,355 29 of them have already gone under since the crisis started. 232 00:14:39,835 --> 00:14:44,115 But one of Ofgem's directors has resigned in protest. 233 00:14:44,115 --> 00:14:47,195 This is her first interview. 234 00:14:48,755 --> 00:14:52,275 The Ofgem board has to weigh up a number of competing desirable 235 00:14:52,275 --> 00:14:57,515 things when it takes decisions on the price cap. 236 00:14:57,555 --> 00:15:01,635 One is keeping the market reasonably stable, but another one 237 00:15:01,635 --> 00:15:04,435 is obviously protecting the interests of consumers. 238 00:15:04,435 --> 00:15:08,355 My view was that the top priority to protect consumers this winter 239 00:15:08,355 --> 00:15:11,435 was to keep bills as low as possible and that's not the decision 240 00:15:11,435 --> 00:15:13,395 that the board took. 241 00:15:13,395 --> 00:15:18,315 The board took the decision to actually allow suppliers to claw 242 00:15:18,315 --> 00:15:21,075 back more funds on bills, to get them through this 243 00:15:21,075 --> 00:15:23,795 very difficult period. 244 00:15:23,795 --> 00:15:26,275 I couldn't agree with that. 245 00:15:26,275 --> 00:15:29,075 Is the price cap fit for purpose? 246 00:15:29,075 --> 00:15:32,675 The price cap was invented to deal 247 00:15:32,675 --> 00:15:37,155 with yesterday's problem, and it really isn't fit for dealing 248 00:15:37,155 --> 00:15:41,835 with today's problem, which is extremely high and volatile 249 00:15:41,835 --> 00:15:46,315 energy prices, because it can't reduce the wholesale price. 250 00:15:46,315 --> 00:15:48,995 It's only dealing with the retail bit of the market. 251 00:15:48,995 --> 00:15:51,395 So I think now we need a completely different set 252 00:15:51,395 --> 00:15:54,075 of solutions in order to protect consumers and, in my view, 253 00:15:54,075 --> 00:15:58,035 only government can actually provide those solutions. 254 00:16:04,915 --> 00:16:08,675 Ofgem says it's working with the Government and industry 255 00:16:08,675 --> 00:16:10,595 to find solutions, and is doing everything possible 256 00:16:10,595 --> 00:16:13,835 to protect customers. 257 00:16:20,075 --> 00:16:25,075 Ten days ago, another rise in the price cap was announced. 258 00:16:25,115 --> 00:16:28,355 Millions of households in England, Scotland and Wales will see 259 00:16:28,355 --> 00:16:30,795 their energy bills soar by 80% after the regulator... 260 00:16:30,795 --> 00:16:32,435 Shocking. 261 00:16:32,435 --> 00:16:34,875 ..raised its price cap. 262 00:16:34,875 --> 00:16:39,715 Liz is still on a variable rate, so her bills are going up again. 263 00:16:39,715 --> 00:16:44,635 Now in October, that will jump to £3549 a year. 264 00:16:44,635 --> 00:16:48,875 It will be bigger than our mortgage. 265 00:16:48,875 --> 00:16:53,715 We will maybe able to have support from other family members, you know, 266 00:16:53,715 --> 00:16:56,795 but at the same time, you don't want to be doing that - 267 00:16:56,795 --> 00:16:59,235 calling on people in your family to help pay your 268 00:16:59,235 --> 00:17:00,275 regular household bills. 269 00:17:00,275 --> 00:17:02,955 That just doesn't sit well at all. 270 00:17:02,955 --> 00:17:05,155 It's not what people should be doing. 271 00:17:05,155 --> 00:17:08,275 They shouldn't be looking to get a loan to pay their energy bills. 272 00:17:08,275 --> 00:17:11,235 It's just not...it's not right. 273 00:17:15,275 --> 00:17:18,955 It's not just the price of gas that's spiralling - 274 00:17:18,955 --> 00:17:23,515 the price of electricity increased five-fold in a year, 275 00:17:23,515 --> 00:17:27,395 from £80 a megawatt hour to around £400. 276 00:17:27,395 --> 00:17:30,875 The steep rise in electricity prices makes sense 277 00:17:30,875 --> 00:17:33,155 if it's powered by expensive gas. 278 00:17:33,155 --> 00:17:37,235 But more than half the UK's electricity comes from 279 00:17:37,235 --> 00:17:40,355 other power sources, like nuclear or renewables. 280 00:17:40,355 --> 00:17:42,835 So why's that gone up too? 281 00:17:44,995 --> 00:17:47,435 This graph shows what's going on. 282 00:17:47,435 --> 00:17:51,235 It doesn't matter how electricity is produced. 283 00:17:51,235 --> 00:17:54,315 It always tracks the price of gas. 284 00:17:57,355 --> 00:18:01,795 I think what many people find surprising is that the 40% 285 00:18:01,795 --> 00:18:05,075 of our electricity that we get from gas sets the price 286 00:18:05,075 --> 00:18:08,315 on the whole electricity market. 287 00:18:08,315 --> 00:18:10,915 So when the price of gas goes up, the price of 288 00:18:10,915 --> 00:18:12,755 electricity goes up too. 289 00:18:12,755 --> 00:18:15,835 And because the price of gas has gone up five times or so, 290 00:18:15,835 --> 00:18:19,635 the price of electricity has gone up by a similar amount. 291 00:18:25,395 --> 00:18:28,515 It means companies that make electricity without using gas 292 00:18:28,515 --> 00:18:31,635 can make a killing. 293 00:18:35,115 --> 00:18:39,115 This is Sizewell B, in Suffolk. 294 00:18:40,075 --> 00:18:45,275 15% of the UK's electricity comes from nuclear plants like this one. 295 00:18:46,835 --> 00:18:49,635 The cost of generating electricity from nuclear power 296 00:18:49,635 --> 00:18:52,355 isn't really going up. 297 00:18:52,355 --> 00:18:55,315 But the market price for electricity has skyrocketing. 298 00:18:55,315 --> 00:18:58,875 It means a windfall for the nuclear industry. 299 00:19:03,915 --> 00:19:08,635 EDF - the French company that owns our nuclear power stations - 300 00:19:08,635 --> 00:19:11,195 hasn't made a big profit yet. 301 00:19:11,195 --> 00:19:16,395 It's locked into long-term sales contracts at much lower prices. 302 00:19:16,755 --> 00:19:21,275 But as these contracts end, EDF will be able to sell electricity 303 00:19:21,275 --> 00:19:25,395 for far more than it costs to make. 304 00:19:27,955 --> 00:19:30,675 You can see the profits to be made by looking 305 00:19:30,675 --> 00:19:34,035 at EDF's business partner, Centrica. 306 00:19:34,035 --> 00:19:38,675 It's also selling some of that nuclear electricity. 307 00:19:38,675 --> 00:19:42,355 And the price it's charging has already doubled in the past year. 308 00:19:42,355 --> 00:19:46,155 It's helped Centrica's overall profits rise five-fold 309 00:19:46,155 --> 00:19:49,355 over the same period. 310 00:19:50,155 --> 00:19:54,715 Both companies say nuclear is a long-term investment and that 311 00:19:54,715 --> 00:19:58,835 profits should not be assessed on a short-term basis. 312 00:20:00,635 --> 00:20:04,595 The nuclear industry is doing very well at the moment. 313 00:20:04,595 --> 00:20:07,355 We don't know from exactly what contracts they've entered into. 314 00:20:07,355 --> 00:20:10,675 We would certainly expect that the nuclear generators 315 00:20:10,675 --> 00:20:13,035 are making much higher profits than they would do normally. 316 00:20:13,035 --> 00:20:15,675 It's really as simple as that. 317 00:20:22,355 --> 00:20:26,715 It's a similar story with wind farms. 318 00:20:31,315 --> 00:20:33,715 Modern wind farms can make a megawatt hour 319 00:20:33,715 --> 00:20:37,395 of electricity for less than £50. 320 00:20:37,395 --> 00:20:40,675 But you can currently sell that megawatt hour for many times 321 00:20:40,675 --> 00:20:43,315 that price on the open market, 322 00:20:43,315 --> 00:20:46,555 so there are extraordinary profits to be made. 323 00:20:47,755 --> 00:20:51,595 The Government says it's looking at ways to "decouple" electricity 324 00:20:51,595 --> 00:20:55,235 prices from the price of gas. 325 00:20:55,235 --> 00:20:57,915 But there's no quick fix, 326 00:20:57,915 --> 00:21:00,875 even though we're all paying so much. 327 00:21:01,555 --> 00:21:05,435 We've made some estimates of how much the revenues in the electricity 328 00:21:05,435 --> 00:21:09,715 sector have increased. 329 00:21:09,715 --> 00:21:13,355 Roughly, we find the revenues going to wholesale generators 330 00:21:13,355 --> 00:21:17,635 went up from about 14, £14.5 billion in 2019, 331 00:21:17,635 --> 00:21:21,875 to 30 billion by 2021, and our estimate is that 332 00:21:21,875 --> 00:21:24,395 will close to double again. 333 00:21:24,395 --> 00:21:28,315 Almost certainly this year over £50 billion. 334 00:21:28,315 --> 00:21:31,235 Now, some of that is taken up genuinely by the increased cost 335 00:21:31,235 --> 00:21:33,435 of running gas plants. 336 00:21:33,435 --> 00:21:38,635 But I think it is quite clear that if the electricity system reflected 337 00:21:38,715 --> 00:21:43,235 the average cost of making the stuff, it would save consumers 338 00:21:43,235 --> 00:21:46,075 at least 10 billion a year. 339 00:21:49,115 --> 00:21:53,955 Some wind farms aren't just profiting from sky-high prices - 340 00:21:53,955 --> 00:21:57,635 they're getting hand-outs on top. 341 00:21:57,835 --> 00:22:01,155 The Government brought in the subsidies 20 years ago 342 00:22:01,155 --> 00:22:03,475 to encourage green energy. 343 00:22:03,475 --> 00:22:08,395 They add another £6 billion a year to our electricity bills. 344 00:22:10,795 --> 00:22:15,115 For those renewable generators that got into the early 345 00:22:15,115 --> 00:22:17,115 subsidy system, they got two income streams. 346 00:22:17,115 --> 00:22:19,595 They're selling into the wholesale market, but they've also got 347 00:22:19,595 --> 00:22:22,795 the contract that guarantees them a subsidy on top of that from every 348 00:22:22,795 --> 00:22:27,995 unit of renewable energy they sell. 349 00:22:29,915 --> 00:22:33,195 So, yeah, those renewable generators are doing extremely well now. 350 00:22:35,715 --> 00:22:40,755 One company doing particularly well is Greencoat UK Wind. 351 00:22:40,995 --> 00:22:45,155 It has stakes in 38 wind farms that get the green subsidy, 352 00:22:45,155 --> 00:22:49,435 like this one in South Wales. 353 00:22:50,675 --> 00:22:53,515 Greencoat can now get about four times as much for its electricity 354 00:22:53,515 --> 00:22:56,795 as it did a year ago. 355 00:22:56,795 --> 00:23:00,275 That's a huge windfall profit, and the company still gets 356 00:23:00,275 --> 00:23:04,275 the subsidies from our energy bills on top of that. 357 00:23:09,395 --> 00:23:14,435 Greencoat stands to get millions of pounds in subsidies this year, 358 00:23:14,835 --> 00:23:20,115 while the company's profits more than quadrupled to £550 million. 359 00:23:23,955 --> 00:23:27,955 Greencoat says it "pays a fixed dividend" to shareholders 360 00:23:27,955 --> 00:23:30,275 and all remaining cash is "reinvested into further 361 00:23:30,275 --> 00:23:33,955 renewables capacity in the UK". 362 00:23:35,115 --> 00:23:40,035 The company says it has "invested over £4.5 billion and plays 363 00:23:40,035 --> 00:23:43,475 a crucial role in the UK's long-term energy security and 364 00:23:43,475 --> 00:23:46,315 low-carbon transition". 365 00:24:02,595 --> 00:24:06,395 It's the most vulnerable families who are paying the price 366 00:24:06,395 --> 00:24:10,275 of the UK's energy crisis. 367 00:24:10,675 --> 00:24:12,915 How are you doing? 368 00:24:12,915 --> 00:24:17,755 You're relaxing, are you? 369 00:24:17,755 --> 00:24:21,835 Dan cares for his nine year-old daughter, Elisa, in Bournemouth. 370 00:24:21,835 --> 00:24:24,675 She has a severe form of cerebral palsy. 371 00:24:24,675 --> 00:24:27,955 Good girl. 372 00:24:27,955 --> 00:24:32,355 Um, so Elisa has various medication throughout the day. 373 00:24:32,355 --> 00:24:37,315 So, she has them all directly into her stomach using a button. 374 00:24:38,995 --> 00:24:41,955 Is that nice? 375 00:24:45,595 --> 00:24:49,995 The machines that keep her alive all use electricity. 376 00:24:49,995 --> 00:24:54,395 And the family's bill has trebled in a year. 377 00:24:56,595 --> 00:25:01,875 So we can afford to pay for the bills that keep Elisa alive, 378 00:25:03,435 --> 00:25:05,515 which about works - if the bill stays like 379 00:25:05,515 --> 00:25:08,715 this - it about works. 380 00:25:08,715 --> 00:25:11,035 But not for long, especially if there's going to be 381 00:25:11,035 --> 00:25:13,235 another price hike. 382 00:25:13,235 --> 00:25:15,275 We can't shave off anything any more, 383 00:25:15,275 --> 00:25:17,915 so I don't know what we are going to do then. 384 00:25:17,915 --> 00:25:20,715 Our dependency is total. 385 00:25:20,715 --> 00:25:25,835 We can't shave off anything from what we need for Elisa. 386 00:25:26,115 --> 00:25:31,355 So let's say we can't afford to feed her through the feed pump - 387 00:25:31,395 --> 00:25:33,835 she would starve. 388 00:25:33,835 --> 00:25:38,755 That's the only way to feed her, through the button. 389 00:25:38,755 --> 00:25:41,835 So all of this equipment, they are a lifeline for her - 390 00:25:41,835 --> 00:25:43,915 they literally keep her alive. 391 00:25:43,915 --> 00:25:46,155 We need them. 392 00:25:55,355 --> 00:25:58,475 So I might have to put some oxygen on in a moment 393 00:25:58,475 --> 00:26:00,395 cos her saturation levels are dipping a little bit. 394 00:26:00,395 --> 00:26:03,035 It's probably because she's starting to fall asleep. 395 00:26:08,675 --> 00:26:13,755 They're raising their prices and they just don't understand that 396 00:26:13,795 --> 00:26:18,555 for us, electricity is the difference between life and death. 397 00:26:21,595 --> 00:26:25,555 If prices keep rising, they may not be able to afford 398 00:26:25,555 --> 00:26:29,035 to care for Elisa at home. 399 00:26:31,395 --> 00:26:35,715 I'm worried, if there is going to be another price hike, 400 00:26:35,715 --> 00:26:38,555 I am worried that we can't keep Elisa home. 401 00:26:38,555 --> 00:26:41,475 That... 402 00:26:41,475 --> 00:26:44,635 Because we need to look at - as much as we would love 403 00:26:44,635 --> 00:26:48,275 to have her home - we need to look at where she is the safest, 404 00:26:48,275 --> 00:26:53,035 and if we can't afford our bills then she would be safest 405 00:26:53,035 --> 00:26:57,555 in a hospital where the equipment is there, that she needs. 406 00:26:57,555 --> 00:27:01,115 I don't - we don't want that to happen but 407 00:27:01,115 --> 00:27:04,155 if there is no other option, then that might happen. 408 00:27:10,235 --> 00:27:15,475 The Government says its "£37 billion package of help" will see most 409 00:27:15,555 --> 00:27:20,635 people receive a "£400 discount on their energy bills", 410 00:27:20,675 --> 00:27:25,875 and that "one in four UK households will see £1200 extra support". 411 00:27:27,915 --> 00:27:30,515 It says ministers are discussing ways to "ensure markets function 412 00:27:30,515 --> 00:27:33,435 effectively for consumers". 413 00:27:39,675 --> 00:27:44,635 Britain's new Prime Minister has promised tax cuts and a plan 414 00:27:44,635 --> 00:27:49,675 within the next week to deal with soaring energy costs. 415 00:27:49,675 --> 00:27:51,835 But Liz Truss has ruled out further windfall taxes 416 00:27:51,835 --> 00:27:55,795 on the energy companies. 417 00:27:55,795 --> 00:27:58,195 And how do you feel when you hear the news, 418 00:27:58,195 --> 00:28:00,635 that these energy producers are making eye-watering profits? 419 00:28:00,635 --> 00:28:04,275 It makes you so angry. 420 00:28:04,275 --> 00:28:07,355 What's their profit going to be in the winter when they hike up 421 00:28:07,355 --> 00:28:10,475 all of our prices and we can't afford our energy bill any more? 422 00:28:10,475 --> 00:28:11,995 It's just disgusting. 423 00:28:11,995 --> 00:28:16,275 The energy companies say they're concerned about customers 424 00:28:16,275 --> 00:28:21,035 and have put forward plans to ease the crisis. 425 00:28:21,035 --> 00:28:25,635 But the profits of some companies look set to rise still further. 426 00:28:28,675 --> 00:28:32,915 I think it's quite obscene for energy companies to be 427 00:28:32,915 --> 00:28:38,195 posting profits in the billions when we are struggling 428 00:28:38,795 --> 00:28:41,435 to actually pay their bills. 429 00:28:41,435 --> 00:28:44,475 And I think energy companies are isolated from the reality 430 00:28:44,475 --> 00:28:47,875 of a family like ours.