Energy firms earn billions while your bill stays high

On 29 October 2026, Shell reported adjusted quarterly earnings of 10.8 billion dollars. For households focused on paying their energy bills, that creates an uncomfortable contrast. Vattenfall also reported higher profits for the first nine months of the year. How can an energy company earn so much while consumers still feel the pressure of energy costs?

The answer lies in the chain between the energy source and your socket. Producers, traders, suppliers, grid operators and governments all play a part. The consumer pays at the end of that chain.

Energy changes hands several times before you use it

The chain starts at the source. Gas is extracted, liquefied or transported through pipelines. Electricity comes from gas plants, nuclear power, wind farms, solar panels and other sources. Energy then moves through trading markets, contracts and networks before suppliers sell it to households.

Not every company does the same thing. Shell earns money from oil, gas, liquefied natural gas, refining and trading. Vattenfall generates and sells electricity and heat and supplies energy to customers. Their reported profits cannot be directly compared with the energy bill of a single Dutch household.

The connection still matters. Gas is used not only to heat homes but also to generate electricity when wind and solar output is insufficient. A higher gas price can therefore push electricity prices up as well.

The most expensive power plant can set the price for all electricity

European wholesale electricity markets generally use marginal pricing. Generators offer electricity at prices that reflect factors such as their production costs. Cheaper offers, including wind and solar, are taken first. Other sources are brought in when demand is still not covered.

The final plant needed to meet demand sets the market price. If that plant runs on gas, gas prices can determine the wholesale price of electricity. Producers that generate electricity more cheaply generally receive the same market price for the electricity they sell at that moment.

What does that mean? Wind farms may generate electricity cheaply, but gas plants might still be needed on a calm evening. The gas plant can then set the price across the market. The market price reflects not only the average cost of all electricity but also the cost of the last production needed to meet demand.

This system is designed to bring enough generation into the market and encourage producers to supply electricity when it is needed. The downside for consumers is that cheap generation does not automatically mean a low market price.

Shell does not earn directly from your electricity tariff

Shell's profit does not come directly from household electricity bills. The company earns money from activities around the world. In the third quarter of 2026, Shell reported 10.814 billion dollars in adjusted earnings. It cited factors including higher refining margins and higher realised prices for liquefied natural gas.

Shell also announced a 5 billion dollar share buyback programme for the following three months. A share buyback is when a company purchases its own shares. It can benefit shareholders, but it does not automatically reduce household energy bills.

Vattenfall reported net profit of 24.838 billion Swedish kronor for January to September 2026, compared with 13.097 billion over the same period in 2025. That is an increase of about 90 percent. However, Vattenfall's profit for the third quarter alone fell by 42 percent year on year. The period being measured matters.

These figures show that energy companies can earn substantial profits under certain conditions. They do not prove that Shell or Vattenfall illegally manipulate consumer prices. That would require specific evidence of market conduct or collusion.

Prices do not fall as quickly as they rise

Energy suppliers do not all buy energy at the same time. A supplier may buy months or years ahead to offer customers a fixed price. Another may purchase a larger share closer to the time when energy is used.

As a result, changes in wholesale prices do not immediately affect every contract. When purchasing costs rise, new offers can become more expensive. When wholesale prices fall, customers on fixed contracts may take longer to benefit. Contract terms and duration matter too.

In 2026, the European Central Bank described how wholesale price changes pass through to consumer prices with delays and to different degrees. The European Commission also notes that suppliers use different purchasing strategies. This can create differences between offers, but it also makes it harder for households to judge whether a tariff is fair.

Example: A household signs a fixed contract when wholesale prices are high. Months later, market prices fall, but the contract continues at the agreed price. The supplier does not automatically have to lower that tariff. The price may change when the contract is renewed or amended under its terms.

Your bill includes more than the energy itself

Even if wholesale energy prices fall, the bill contains other costs. In the Netherlands, households pay for the energy supplied, fixed supplier charges, grid transport, energy tax and VAT. Grid charges help fund the transport and management of the infrastructure. Taxes are set by the government.

For 2026, the Dutch government lists energy tax of 73 euro cents per cubic metre of gas and 11.1 euro cents per kilowatt hour of electricity in the first two tax bands. A 21 percent VAT rate also applies to the components of the bill. The energy tax reduction for a qualifying electricity connection was 629 euros including VAT in 2026.

This means a lower wholesale price does not automatically produce an equally large reduction in the total bill. Taxes and grid charges can absorb part of the change. A supplier's earlier purchasing decisions can also affect the tariff.

When does pricing become price manipulation?

Price manipulation is a serious allegation. A high price or a high corporate profit does not, on its own, prove that a company has manipulated the market. Evidence would be needed of conduct such as collusion, misuse of information or artificially restricting supply.

The European Commission says electricity markets need oversight to protect fair competition and prevent market abuse. In the Netherlands, the Authority for Consumers and Markets supervises energy suppliers and examines differences between tariffs and the reasons behind them.

There is still a structural problem that consumers can experience without any illegal manipulation. The market price may be set by the most expensive plant needed, while the bill also includes fixed charges and taxes. At the same time, customers cannot always see when their supplier bought energy or what risks it took. That makes it difficult to tell which part of a tariff reflects actual costs and which part reflects the supplier's margin.

Consumers pay the bill but cannot see the whole chain

Consumers have little control over international gas markets, emissions permit prices or electricity supply on a windless evening. Nor can a household see exactly when its supplier bought energy and what risks it took.

There are still things you can check. Compare not only the price per kilowatt hour and cubic metre, but also fixed charges, contract duration, cancellation terms and any export fees for solar power. Review grid charges and taxes separately on the bill. This helps you see which parts your supplier controls and which it does not.

The uncomfortable point is simple: high company profits and high household bills can exist at the same time because they are not directly linked. Wholesale prices, purchasing decisions, taxes and grid charges all shape what you pay. To judge whether a bill is fair, you need to look beyond one energy company's profit figures.

Questions to ask

• What share of my tariff is energy, fixed charges, grid costs and tax?
• When and how does my supplier buy energy?
• How quickly do lower wholesale prices reach customers on my type of contract?
• Which regulator can act if there is evidence of energy market abuse?

This article is for educational purposes and is not financial advice.

Sources

• Shell, third quarter 2026 results, 29 October 2026
• Vattenfall, results for January to September 2026, 29 October 2026
• European Commission, electricity market design
• European Central Bank, how wholesale prices pass through to consumer bills, 2026
• Authority for Consumers and Markets, Energy Monitor, 11 September 2026
• Dutch government, components of the energy bill, 2026