Consumers and businesses are bracing themselves for an unprecedented situation in Australia's energy markets. A dark cloud has been floating over ASX energy shares in the last week as fossil fuels reach mind-blowing prices.

Initially, one might think this would be a boon for energy retailers. If prices rise, profits should rise too, right? Well, because keeping the lights on is an absolute necessity for modern society, the energy market is heavily regulated. Additionally, with wholesale gas prices reaching 80 times their normal level, the majority of consumers would be unable to afford the inflated cost.

So, how exactly is this playing out for the energy sector and ASX shares?

State of play in energy

The sobering reality is Russia had accounted for around 17% of the world's natural gas supply. Meanwhile, Europe's reliance on Russia is far greater than the rest of the world. At 40% of its gas imports, Russia has a firm grip on the European Union (EU).

Due to the sizeable shortfall in supply as the world banishes the importing of Russian products, the demand has spread globally. In turn, the going rate for energy-rich commodities has exploded, putting pressure on energy retailers.

Last week, news hit the headlines of Weston Energy ceasing operations. The gas retailer responsible for 7% of Australia's east coast commercial and industrial supply shut up shop. A more than 180% increase in gas prices was cited as the culprit.

The damage is also being witnessed in public markets. ASX-listed small-cap energy share, Locality Planning Energy Holdings Ltd (ASX: LPE) entered voluntary suspension after suggesting to its 20,000 retail customers to seek out a new supplier. The company planned on increasing its electricity prices by over 100% on 1 June.

Showing that the pain is not exclusive to the small end of town, Origin Energy Ltd (ASX: ORG) was dealt a blow yesterday after revealing a toll on its expected earnings. The ASX energy giant now expects its underlying earnings before interest, tax, depreciation, and amortisation (EBITDA) to be between $310 million to $460 million for its energy markets division.

Aren't higher prices good for ASX energy shares?

There's an important variable in this equation for energy retailers. One that morphs high prices from a potential tailwind into a likely headwind. In the finance world, it's called a price ceiling — but it is commonly referred to as a price 'cap'.

To try and maintain an orderly energy market, regulators have stepped in and introduced price caps. For instance, the Australian Energy Market Operator (AEMO) applied a $40 per gigajoule to the Victorian gas supply on Tuesday. Meanwhile, the 'real' price reached $800 per gigajoule.

In essence, this means that ASX energy shares such as Origin and AGL Energy Ltd (ASX: AGL) won't be able to take full advantage of this 'perfect storm'.

The post In the dark: ASX energy shares facing a perfect storm appeared first on The Motley Fool Australia.

The Locality Planning Energy Holdings Ltd (ASX: LPE) share price is rocketing higher today, gaining a massive 47.22%.

Right now, the Locality Planning Energy (LPE) share price is 26.5 cents – up from its previous close of 18 cents.

Earlier today, the LPE share price reached 34 cents, which represents a 67% gain.

LPE is an energy provider focused on the New South Wales and Queensland markets. According to the company, it has used first-to-market technology to provide apartment buildings with solar energy and carbon-neutral hot water systems.

Today's massive gain follows the company's release of a trading update and unaudited preliminary results for the 2021 financial year.

Let's take a look at what's driving the Locality Planning Energy share price today.

Successful financial year

The LPE share price is soaring today after the company announced it has passed a milestone 10,000 new customers and a $1 million net profit, which is also LPE's maiden net profit.

Over the 2021 financial year, LPE reported growth across all key financial metrics.

The company reported a 27% increase in revenue, while its operating costs only increased 8%.

LPE's earnings before interest, tax, depreciation, and amortisation (EBITDA) grew by 217% over the 2021 financial year.

Its EBITDA went from a $3.8 million loss in the 2020 financial year, to a $3.6 million profit in the financial year just ended.

It also posted $55 million in reoccurring revenue.

Finally, it now has 41,000 customers using its services.

Commentary from management

LPE chair Justin Pettett commented on the company's results:

The company's maiden net profit represents just the beginning of the delivery on our vision for the company… [We] look forward to building on these results into FY22, as the company begins to deploy its unique, and exclusive shared solar product to strata communities throughout Queensland and New South Wales…

[The] company is now positioned for further growth with the uptake of our exclusive shared solar for apartment living.

LPE share price snapshot

For a moment, the LPE share price was in the green today on a year to date basis. However, it's dipped slightly from its intraday high.

Right now, LPE shares have fallen 5% in 2021. They've also dropped 24% since this time last year.

The company has a market capitalisation of around $16 million, with approximately 62 million shares outstanding.

The post Why the Locality Planning Energy (ASX:LPE) share price is up 47% today appeared first on The Motley Fool Australia.