Simplifying Energy #1: How does the energy market work?

This is the first video in a series aimed at simplifying the over-complicated UK energy market.

In this video I give a very basic overview of the three main groups of the energy market and their role within it:
- Producer
- Supplier
- End user

[emmat]

Look forward to the rest of the videos. I'd like to know exactly what has contributed to the massive price increases, as the explanations given by energy companies, government and media just don't seem to add up! Thank you

[JeffreyEdwards-or]

Although it is useful to provide these basic aspects of the structure of the industry it would be useful to know more about exactly how the producers come to be producers. Who are they? How do they know there is is a source of energy in this or that location? Who is considered to OWN the energy source and what responsibilities come with the role of extractor?producer? It would also be useful to find out about INVESTMENT in these companies? Who invests? How are profit levels determined and who ensures that the energy producers meet all the requirements set out in their contracts with governments. What global standards apply, if any?

[jimjohn]

Thanks .It is good. Although, in my opinion, you could give more information about the producers: who they are and how /from where they produce their energy (i.e. Bite Gaz (UK) has a nuclear power in County; Squid (Japan) windmills in North sea ... ), to whom they sell, and other minor intermediaries . I am quite confused with suppliers and the difference in prices. Why it is cheaper from a second minor intermediary than from the supplier itself Thanks

[jasonmuddeman]

In the basic form this is just the process of workings but I disagree with the part that producers set the price. The world economic markets sets the price of the wholesale medium and the producers merely sell at what the market rates are. This is why the companies that sell their energy are making record profits and we as consumers are having to pay more. Blaming the companies is inaccurate as they the only choice they have is sell or not sell and by not selling they won’t be viable business. Explain who sets the wholesale costs further and the factors that influence the price. When the market prices are rock bottom the companies don’t get windfall handouts because it costs them more to produce than they can sell it for. They literally have to make a business decision whether to ride it out or shut down.

[charleskerr]

My supplier has advised that they are reducing my charges as from next month. However, when I contacted them to ask if that meant they would be reducing the monthly direct debit they said no. What it does means is that what they charge me will come down but they will not necessarily reduce the monthly payment. As I am presently some £230.00 in credit with them, is that not a bit ridiculous?

[BN-hynd]

I hope you will cover why solar energy costs so much to the ordinary household

[faruksataki]

IF the "Producers add profits on to the wholesale cost" as you've mentioned then, shouldn't the price of energy be dropping instead of increasing...?
If our political leaders around the world stopped wars around the world, wouldn't it make the energy prices and inflation reduce and help the worlds economy..?

[sailorjohn]

How can the regulator justify increases in wholesale cost of home produced wind energy? How can ofgem justify increases on daily standing charges? How can government justify allowing foreign interests to control our fundamental infrastructures?

[brianpetra]

You are confusing people. No mention of the ridiculously high Standing charges or the amount we have to contribute towards the costs of suppliers going Bust.

[anonomask]

Are the suppliers secretly making profits by selling me credit and can I say no and refuse to pay on the basis of fraud