Can someone explain again - how are energy companies make so much profit?

RobM99

Wow, politics on here?!

ariarnia

RobM99 said:

Wow, politics on here?!

its the nature of the topic. people look at a headline and think its horrible but the situation under it is all connected. you can't just change one bit and not think its part of a wider system which includes our (normal people's) attitudes and choices. complaining about something we dont like means we have to look in the mirror and see how we contributed to that situation by demanding things be easy/cheap/quick/didnt inconvenience us in the years before 

ariarnia

back on the topic of the op. 

how on earth are normal people (who are only a little interested in energy) suposed to understand this!?

EDF's UK profits soar after electricity price hikes

French energy giant EDF's UK arm returned to profit in 2022, boosted by it being able to sell the electricity it generated for a higher price. 

Underlying profit was £1.12bn, compared with a loss of £21m in 2021 mainly down to improved performance from its nuclear electricity generators. 

But its UK consumer energy supplier lost more than £200m in the year. 

EDF blamed the cost of buying energy for customers which was higher than the prices set under the energy price cap.

https://www.bbc.co.uk/news/business-64647854

matt_drummer

ariarnia said:

matt_drummer said:

 It's remarkable when I travel to other countries that there are one or two disabled parking bays at a supermarket, here there are loads, why do we have so many more (as a proportion) disabled people than say Latvia?

why do you think we have more disabled people than latvia and not that we have more VISABLE disabled people because the people in latvia are stuck at home dependent on family because they can't do things like go to the supermarket or work?

tho it could also be that i remember when we went to finland and they didn't have disabled bays. because all of the bays were bigger than ours and there always seemed to  be spaces near the front empty (maybe the non disabled people didn't mind walking so didn't feel the need to park right outside the doors?)

Please don't get the wrong idea, I am not judging at all, I have no idea what disabilities people may have and how they affect them and it really is none of my business.

Maybe you are correct, disabled people here are able to live different lives to those in Latvia, and that's great. In the main, I would say we look after people better here and that comes from our taxes.

This is started from the suggestion that we should pay more tax, maybe we should, but I also feel that the tax I pay is wasted to some extent. So before I pay even more, which I am not against necessarily, I would be happier if I felt it was going where it was needed.

I am lucky at the moment, I have a good job and earn way more than average, but that has only been for the last couple of years. Before that I was fairly averagely paid.

So, I'm an old father, 56 years old, got married later in life and we have an 8 year old. Despite not being rich, paid taxes all my working life, never paid really well until two years ago, I get no child benefit, my wife gets it and they take it from me in tax.

I recently got a bonus from work, out of the £10,000, I received £5,800 and the government got 5,338 ( £10,000 + 13.8% = £11,138 - £5,8000 = £5,338)

The country got almost as much as me and by the time I have spent it on stuff they might get another £967 in VAT.

Really, how much tax do we need to pay?

matt_drummer

ariarnia said:

back on the topic of the op. 

how on earth are normal people (who are only a little interested in energy) suposed to understand this!?

EDF's UK profits soar after electricity price hikes

French energy giant EDF's UK arm returned to profit in 2022, boosted by it being able to sell the electricity it generated for a higher price. 

Underlying profit was £1.12bn, compared with a loss of £21m in 2021 mainly down to improved performance from its nuclear electricity generators. 

But its UK consumer energy supplier lost more than £200m in the year. 

EDF blamed the cost of buying energy for customers which was higher than the prices set under the energy price cap.

https://www.bbc.co.uk/news/business-64647854

It's simple, they are separate companies and achieve a profit or loss based on their activities.

The energy is sold by the generating company at a market price, they are not allowed to sell to one of their own companies for less than the market price (it has been explained why earlier in the thread).

The retailer has to buy the energy at the market price, and in this country, the price they can sell at is capped, as are their potential profits.

So the retailers make small (based on the level of turnover) profits or even losses.

The generating companies make profits by selling what they have to the world. Energy is/was in short supply and the price went up as different buyers around the world tried to secure the energy they needed.

The costs of generating/extracting energy didn't go up as much as the selling price so they made bigger profits.

Obviously there's more detail but that is basically all that has happened.

ariarnia

matt_drummer said:

ariarnia said:

back on the topic of the op. 

how on earth are normal people (who are only a little interested in energy) suposed to understand this!?

EDF's UK profits soar after electricity price hikes

French energy giant EDF's UK arm returned to profit in 2022, boosted by it being able to sell the electricity it generated for a higher price. 

Underlying profit was £1.12bn, compared with a loss of £21m in 2021 mainly down to improved performance from its nuclear electricity generators. 

But its UK consumer energy supplier lost more than £200m in the year. 

EDF blamed the cost of buying energy for customers which was higher than the prices set under the energy price cap.

https://www.bbc.co.uk/news/business-64647854

It's simple, they are separate companies and achieve a profit or loss based on their activities.

i know that. you know that. but how are 'people' reading the headline supposed to know that from what' written?

matt_drummer

ariarnia said:

matt_drummer said:

ariarnia said:

back on the topic of the op. 

how on earth are normal people (who are only a little interested in energy) suposed to understand this!?

EDF's UK profits soar after electricity price hikes

French energy giant EDF's UK arm returned to profit in 2022, boosted by it being able to sell the electricity it generated for a higher price. 

Underlying profit was £1.12bn, compared with a loss of £21m in 2021 mainly down to improved performance from its nuclear electricity generators. 

But its UK consumer energy supplier lost more than £200m in the year. 

EDF blamed the cost of buying energy for customers which was higher than the prices set under the energy price cap.

https://www.bbc.co.uk/news/business-64647854

It's simple, they are separate companies and achieve a profit or loss based on their activities.

i know that. you know that. but how are 'people' reading the headline supposed to know that from what' written?

I don't really know why most people need to concern themselves with the profits of these companies.

I used to work with someone, every time British Gas announced their profits (he was a customer) he would proclaim it was a disgrace and he was being ripped off.

He would never listen to reason though.

He would say that as British Gas had just announced an annual profit let's say £500 million, he was being ripped off with his £1,500 a year gas and electricity bill.

When it was explained to him that British Gas had 20 million customers and that if they supplied him without making a profit at all he would save £25 a year he wasn't interested.

Big companies deal in big numbers, the profits sound a lot, but in normal times, per unit of electricity, gas, oil or whatever, they don't make so much, and if they made nothing it would have very little impact on the size of our bills.

Now is a bit different, we had coronavirus and now a war.

But generally, these companies make a lot of profit as they sell a huge amount of a product, not because they are charging you ten times what it cost them.

matt_drummer

ariarnia said:

matt_drummer said:

ariarnia said:

back on the topic of the op. 

how on earth are normal people (who are only a little interested in energy) suposed to understand this!?

EDF's UK profits soar after electricity price hikes

French energy giant EDF's UK arm returned to profit in 2022, boosted by it being able to sell the electricity it generated for a higher price. 

Underlying profit was £1.12bn, compared with a loss of £21m in 2021 mainly down to improved performance from its nuclear electricity generators. 

But its UK consumer energy supplier lost more than £200m in the year. 

EDF blamed the cost of buying energy for customers which was higher than the prices set under the energy price cap.

https://www.bbc.co.uk/news/business-64647854

It's simple, they are separate companies and achieve a profit or loss based on their activities.

i know that. you know that. but how are 'people' reading the headline supposed to know that from what' written?

And our media thrives on doom and gloom and often fails to tell the whole story.

The media want viewers and readers, they are selling something.

Honestly, if you think about it, a company with millions of customers will make profits of millions and millions, if they didn't there would be something wrong.

But the media never tells you how much they made per customer, just a big headline with a big number.

pochase

Blame the people who are writing the headlines.

The headlines have not much  to do with reality, they cater fro what people already feel and believe.

If you are very lucky you get the real information soemwhere hidden in the article.

BBC seems to get onto the same level here as the Daily Fail.

Mobtr

ariarnia said:

back on the topic of the op. 

how on earth are normal people (who are only a little interested in energy) suposed to understand this!?

EDF's UK profits soar after electricity price hikes

French energy giant EDF's UK arm returned to profit in 2022, boosted by it being able to sell the electricity it generated for a higher price. 

Underlying profit was £1.12bn, compared with a loss of £21m in 2021 mainly down to improved performance from its nuclear electricity generators. 

But its UK consumer energy supplier lost more than £200m in the year. 

EDF blamed the cost of buying energy for customers which was higher than the prices set under the energy price cap.

https://www.bbc.co.uk/news/business-64647854

Yeah, didn’t see this one on the news this morning. Could be down to the fact that globally had huge losses  so obviously can’t be as sensationalised as Centrica & Shell