@OhYouBadBadKitten
I'm not sure if I'm missing something, or if I've got my calcs wrong. I've fixed with ovo a few weeks ago for gas at 4p/KwH. That's about £1.20/Therm.
Market gas prices are £1.76/Therm at the moment.
How can I be paying so much less than the market price and how on earth can energy companies survive that sort of loss?
They should have pre-guaranteed the price they pay. This is how it should work for utilities supply and also fixed rate mortgages etc.
They have a contract with a supplier to buy a package of energy/funding at a certain price and they then sell that at a profit to customers by offering it at a fixed price for a certain time (or a fixed rate mortgage).
What they're supposed to do is match the amount of energy they have available to sell with the customers usage, but some of these smaller suppliers have failed to do this, so they're faced with a contract to supply energy to a customer at a certain price until X date, but have run out of energy available (this is all virtual, whoever pays for the energy, it comes straight from the power station/gas network to our homes, but the financial arrangement goes via a third party).
So the intermediary has to buy more energy at a higher price and sell it at a loss to their customers. Hence why so many of them are at risk of going bust, they're racking up large debts.
Someone on MSE has posted an analysis of Avro's balance sheet showing how it's gone from one inexperienced 20 YO starting an energy company(!) possibly helped by his dad, to a well known supplier that lost £27M in 2019 and it looks like the owner managed to skim off some large profits for himself along the way.
forums.moneysavingexpert.com/discussion/6298311/how-can-so-many-energy-companies-fail-theyre-built-on-sand-a-total-scam