If wholesale energy prices have risen massively, how come.....

[Rampxoxo]

Energy suppliers are making humongous profits? Surely, if they are paying loads to buy energy wholesale (in order to supply us customers) , their profit margins would not be huge.
I am probably dim, but I'm not getting it.

I sympathise, and I am in agreement about the current crop of so called politicians. But this does not stem from the present (or not, as the case may be) Tory administration. It is systemic failure for decades with successive gov'ts in multiple countries.

And nothing they do now will change the outcome remotely enough. There is only so long you can handout cash to consumers and business before you have to address the simple fact: people need to use far less energy.

It may not be getting equally used around the nation, since richer households will use more than poorer ones generally, so that needs to change. The richer people will have to cut back. No ifs or buts. It's not even a case of "yeah, but I can afford it, Jack". There will be actual rationing needed very likely.

Attached is a rough sketch by Ben Moll from LSE about Germany's storage. It handily summarises the precariousness of the situation for them, especially if it's a rough and cold winter. If the flows out are higher than those in or from the reservoir of storage to draw upon, then you run out.

And no amount of being used to cheap, abundant energy is going to put more gas in the ground for us to use. You just have to use less, and that you do use, you will pay more for it.

They aren’t.

Where are you getting your data from, as it seems to be wrong.

Additionally, Nordstream 1 has been fully taken off-stream. That means Europe is now not getting ANY Russian gas. Germany hasn't even fully filled the two month storage depots they have, and Europe's main gas storage capacity is around 60%. Without more gas coming to us, it is basically guaranteed we will have blackouts and industry disconnects without reducing our usage of energy.

One thing that may reduce the likelihood of blackouts are the hundreds of thousands of idiots planning not to pay their bills.

Each one of them who gets cut off reduces the probability of cuts in supply for the rest of us.

But they tell us it's a free market

There's no such thing as a free market. Like all gods, it's imaginary. And like all gods, there are people willing to cause endless death & destruction in its name.

Markets are either regulated or they're rigged by the biggest players. They're never "free".

Hilariously, likely true. People need to wake up fast about reality. This is not "price gouging" like someone selling TP on eBay during the first lockdown for £100 a roll. This is simple resource limits.

No, the gov't can not pay your bills for you so you can keep using energy as you are.

No, there is no new, immediate access energy source we can put into action to counter these shortages.

No, Ukraine surrendering or a peace being otherwise negotiated will not change Russia's mind.

Yes, it is unfair that this is happening. The universe also does not care and you are not entitled to cheap, abundant energy in a world where it is exhausted.

@HappyChloé2 how am I an idiot for not paying a bill that I simply don’t have the money to pay?

I think this should be a question for Liz Truss or Rishi Sunak but oh wait they’re just as fucking useless as me, a minimum wage drone who does spreadsheets for a living.

That's not remotely the same as those that have money and refuse to pay because they "feel" it's too expensive.

I mentioned those not planning to pay, not those unable to. Not everything is about you..l

@Liebig so why the big push in electric cars when we will face all these blackouts etc and are being told to use less
Its bullshit all of it , you won't see lights being turned off and less energy used in goverment buildings and the like

@HappyChloé2 at point did they say it was all about them though did they ? But its a stark reality that many many will not be able to afford to pay
And its not always easy for companies to cut people off in certain circumstances

Because they use far less energy per mile travelled than do internal combustion engines.

The car companies stand to gain from EVs, no one said anything about this being prudent, just good business. The current ESG movement means that "green" business is the current cause du jour. That's simply another way for capitalist ventures to make money off the current trends such as environmentally aware products, think vegan food and clothing as well as electric vehicles. There is nothing "green" about these ventures.

The companies selling those products are not the ones in charge of infrastructure. The politicians cannot tell people bad things, and so it's onwards to net zero and fully electric transport and home energy by 2035, because we mandated it.

We'll ignore that no energy source has ever been fully replaced by another more diffuse and intermittent version. Going from wood to coal to oil to gas and nuclear is, naturally, easier and more progressive than going from nuclear and gas to wood.

In early 2008, were people still selling toxic mortgages to people unable to pay? Why yes, yes they were. Does anyone seriously think they have the foresight to look decades into the future to anticipate the end of the fossil fuel era?

There are very few people talking about this, because if they were to talk about plausible outcomes for the future, they would be voted out of office very quickly for suggesting people cutback on everything.

Which has nothing at all to do with the people planning not to pay.

I think it’s disgraceful. These large companies who pump and distribute energy can only do so because we live in a civilised functioning productive society.

The fact the price of a barrel fell so low during COVID is testament to that.

They don’t have to increase prices, they are doing it because they can. Because without Russia’s cheap gas they have us over a barrel.

I think that’s a fucking disgrace. That in a pre WW3 scenario they all band together and rinse every citizen of this planet for all that they are worth. I don’t really know what to say tbh. In an emergency situation like a pandemic it’s ok for everyone’s civil liberties to be taken away but in an emergency situation like a global energy shortage god help us we can’t possibly touch the global energy companies and demand the charge in a reasonable way.

It’s fucked. As a country we have relied on others far too long. I think we have a lot of very painful lessons we sadly will bear the brunt of learning.

Hang on, the people pumping oil out of the ground in Saudi Arabia are only able to do so because we live in a stable country in the UK?

How exactly are you claiming that that works?

Amen. I’m seriously beginning to consider solar and a heat pump, not because it’s good fiscal sense (although it’s starting to look more and more like it) or because I’m a bit of a lentil weaver (although I am) but because it makes me sick to be funding them.

It’s rebellion. As close as I can get to a boycott without going and living in a tree and making candles out of my earwax. And not paying won’t work. Protesting won’t work (they don’t care) voting hasn’t worked. I’m left with hitting the bastards where it hurts them. In the wallet (well, the shares). I don’t want to give them another penny of mine if I can possibly help it.

I have five loaves of bread, but ten people need a loaf each. What would you do?

Well, have fun getting your own energy then. I'm guessing most people in this thread skipped basic supply and demand models and went straight to the robbing gets part of the econ textbook.

This is how.

www.reuters.com/business/energy/oils-journey-worthless-pandemic-100-barrel-2022-02-24/

A philanthropic bakery would go oh shit, we need to ration. Here’s half a loaf each, for half the price you would usually pay for a full loaf.

Not oh here let’s auction all 5 loaves to the highest bidder.

But that’s what you get when we rely on foreign private companies to supply basic essentials to life.

You think this is good and an acceptable form of business for someone supplying an essential service? What are you suggesting we do with the 5 loaves?

Rationing, you say?

If there’s not enough that’s what’s going to have to happen. What they don’t have to do is charge an extortionate amount for it just because they can.

As for what I’m proposing, that’s what the market price signals are: for indicating rationing is required. Reduction in prices by artificial ways, say, via handouts from the state, indicate no immediate crisis and send the wrong message to people.

There are a limited number of LNG tankers. There are only so many contracts. Someone has to delegate how they get assigned. And that mechanism is markets. If you can’t afford to get the LNG to meet your needs, you either cut back what you have or do without.