It's a combination of problems that are all occurring at the same time.
Firstly energy suppliers are glorified tax collectors. about 65% of the cost of electricity is made of up green taxes/levies that are paying for all the solar panels on people roofs, turbines on hill sides and offshore wind farms. These taxes increase every year and have been the main driver of price increases for the last few years. These taxes are collected by suppliers and paid to the Government in installments. A big instalment is due each October. This is why suppliers "normally" go bust in the winter.
The second problem is hedging. It's a good idea and everyone should do it, but how does it work? You can't hedge individual supplies, the volumes are too small, and how many do you hedge. Do you hedge all the customers you have now? Or all the customers you think you'll have in a month or two? The next issue is how much to hedge - will it be a cold winter or mild? If its cold, when? A bad November means different hedging to a bad December. Hedging is also expensive and energy margins are low.
The third problem is the price cap, this is in theory a good idea, but if the government keeps raising the tax element and cannot control the commodity prices then how does a non responsive cap work? Domestic energy prices are currently loss making for all suppliers. This isn't sustainable and something has to give. If the government keeps the price cap at current levels more suppliers will fail, the cost of failure is passed on to existing suppliers, so therefore fail and so on.
Gas can be stored allowing suppliers to buy in the summer when it's cheap and less in the winter when the prices rise. Except that the UK closed most of it's storage and now only has enough for around 10 days of usage.
Wholesale gas prices are driven by global demand, the economies of SE Asia are recovering and buying more gas, driving up the price of LNG shipments.
The Russian built a new pipeline to deliver gas to Europe, its finished, but isn't pumping gas and the German's haven't approved it yet. This could take months to get approved.
The Russian's could ship more gas via Ukraine, but they don't want to pay the Ukrainian government.
We get a lot of gas from Norway, but less than usual because maintenance was reduced last year due to Covid. That maintenance is happening now.
We have our own gas supplies, but we did do enough maintenance either.
And we've had the wrong kind of wind for the few months. It should be much windier, producing much more power, but a lot of turbines are not running at all.
The weather affects Europe as well, which we import power from, so when they have problems, we have problems and vice versa.
Finally, there was a fire which damaged the largest electricity connection we have to France, and that won't be repaired for months.
