Energy network companies in the United Kingdom are projected to receive windfall profits of up to £7 billion by 2028 due to higher-than-expected inflation, a development linked in part to the ongoing conflict in Iran, according to analysis from the charity Citizens Advice.

Network operators, responsible for maintaining and providing the infrastructure such as pipes and cables that deliver energy to homes, have already benefited from nearly £1 billion in excess returns since the charity last assessed the financial impact in 2025. Citizens Advice’s previous report, published in 2025, found that between 2021-22 and 2024-25, these companies had amassed a £4 billion windfall. Their updated analysis attributes an additional near £1 billion increase to inflation pressures driven by energy market instability and geopolitical tensions arising from the Middle East conflict.

The charity’s report anticipates that by the conclusion of the regulator Ofgem’s price control periods in 2026 and 2028, the total windfall could range between £6.3 billion and £7 billion, contingent on final inflation figures. Authors Merle Jamieson and Andy Manning described the surplus as exceeding “any reasonable or legitimate expectations,” highlighting that while network companies have gained, consumers continue to face rising energy debts, which have climbed to approximately £5 billion.

Although Ofgem has taken steps to close the inflation-related loophole that allowed energy network firms to increase revenues amid price rises, the regulatory change will only come into effect in April 2028. This delay means companies may continue to benefit if inflation remains elevated over the next few years.

Citizens Advice, which supports more than 100,000 people in England and Wales struggling with energy debt, has called on network operators to use some of their excess profits to assist consumers, either by contributing to debt relief or implementing voluntary initiatives aimed at tackling energy affordability.

Dame Clare Moriarty, chief executive of Citizens Advice, criticised the companies for exploiting what she called a regulatory quirk. She emphasized that millions of households have struggled to pay essential energy bills while network companies accrued billions in unearned profits. She stressed the importance of companies taking responsibility, particularly since the loophole has now been closed for future regulatory periods.

Ofgem acknowledged the issues arose amid “extraordinary levels of inflation” and stated the forthcoming changes to price controls should prevent similar excessive financial gains in the future. The regulator encouraged firms to leverage the temporary financial impact of inflation to strengthen their financial positions for consumer benefit over the long term.

In contrast, Lawrence Slade, chief executive of the Energy Networks Association, representing the country’s electricity network operators, challenged the notion of a £7 billion windfall. He argued that Citizens Advice’s calculation fails to consider the long-term investment horizons characteristic of network companies and asserted that their work to secure funding for network modernization and transformation should not be misconstrued as unjustified profit-taking.