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.

Do you even know how those prices are arrived at? Do you think they have someone plugging ever bigger numbers in their sales portfolio?

That’s not how energy markets work. At all. The price is indicative of lack of supply. It’s going up because of price auctions, not because Centrica or Shell’s CEO said “hey, I feel like a new McLaren and mansion, let’s charge €1000 MWh today, yeah”.

Prices will continue to increase until demand comes in line with supply. This is basic auction market theory. If someone goes to Sotheby’s to get a rare item, and someone else really wants it, that’s what happens until one party cannot bid up the price anymore because they hit their limit. Same thing, but in a two way fashion (ignoring how arbitrage can make markets more efficient) happens on international markets for commodities.

And when the baker auctions his 5 loaves to the one fat cat. And the other 9 perish or learn to make their own bread. The one fat cat returns to the baker and says please may I have a loaf. And the baker says well what about the other 4? I have 5. And he says well I only need 1 and I am not paying you £300 for it like last time because Ol’Mary down the road gives her spare away for 10p. The once rich baker packs up his shop and goes to live in a breadless shoe.

As I said lessons need to be learned. And I hope society and governments remember this and ensure these companies learn painful lessons too.

That would mean undoing neoliberal capitalist markets.

There are currently no major political parties in any Western nation with that as a platform.

Additionally, for this to be effective, the whole world would need to be in on it too. Can’t tell Saudi or Qatar or America that they are obligated to share our energy to the needy at any price.

The places that can’t pay go the route Sri Lanka took.

In addition, the major energy producers now are no longer private companies but national ones that aren’t subject to the approaches we may have with BP or Exxon. Gazprom and Aramco are two massively powerful gov’t entities, essentially.

We don’t really need to undo any neoliberal capital woo. We need log burners, and a stack of wood to get through this winter, and the government needs to properly subsidise solar power for homes electricity, upgrade those on gas to electric who can’t afford a switch and fund panels or issue loans for those unable to afford it immediately. And we probably need a war effort level of manufacturing panels as we will likely run out of those too.

Your right. It’s happened now. No ones going to do anything about it as it’s far too complicated. So we have no choice. We need to make our own energy. Fast.