What is the Crystal Energy?
Crystal Energy is the microcurrency used in Spiral Knights. It is an in-game currency that only exists when it is purchased for cash money, though for various promotional reasons, the amount of crystal energy created by a certain amount of cash may not always be the same. It is, however, generally available for a fixed dollar value. (International currencies may vary, as Three Rings is U.S. based.) It is used to unlock in-game content so that individual features of the game can be accessed for very small amounts of money. From here on, it will be referred to as 'CE'.

What is the Crystal Energy Market?

You can purchase CE with the in-game currency of Crowns from the 'Buy Crystal Energy' interface, or if you have already have CE from the market or bought with cash, you can sell it to acquire Crowns. It can only be bought and sold in blocks of 100 CE at a time. This trading is the Crystal Energy Market.

Where is the Crystal Energy Market?

It is anywhere you can find the 'Buy Crystal Energy' interface. Clicking on the amount of CE that you currently have as displayed in the lower right corner of the interface (while the HUD is unlocked) will bring it up, as will talking to one of the strangers in the Town Square of Haven.

The first tab of this interface, 'Purchase' allows you to purchase CE for real cash money. After that, there are two tabs that allow you access to the Crystal Energy market. The second tab, 'Trade', allows you to purchase CE with crowns at the current lowest offer, or to sell CE for crowns for the current highest bid.

The third tab, labeled 'Market', gives detailed access to the Crystal Energy Market. This tab allows you to make your own offers, so if you are unable or unwilling to purchase 100 CE for the current offer, you can bid the value that you are willing to pay. Conversely, if you are unwilling to sell 100 CE for the current bids to buy it, you can offer it for sale for the number of Crowns you choose. (However, you will receive 2% less than the price you ask as a market fee when you are selling CE).

Why is it so expensive to buy Crystal Energy?
The Crystal Energy Market is a player-driven market. All CE for sale was originally put there by players who bought it for real money, though players that have bought CE for Crowns in the past can also resell CE on the market. Essentially, the market reflects that there are players willing and able to purchase Crowns at that rate, and that there are also players willing to sell CE at that rate.

Why doesn't the company make Crystal Energy cheaper?
The business model that Three Rings has chosen means that CE is only created by players buying it for real money. The market is not directly in their control, it's all up to the players. The energy that Three Rings gives freely to players is called Mist Energy, and can be used anywhere CE can, but cannot be traded.

Why don't they cap Crystal Energy prices?
Players can make direct player-to-player transactions. If the market interface had a price cap on CE below the market value, players would soon trade CE directly with each other and ignore the market, and CE would not cost any less.

Why don't Crystal Energy buyers force the price lower by refusing to buy at these high prices?
Essentially, they already do. The market has risen and dropped several times. When it gets too high, players start refusing to buy for crowns and either conserve their energy or else go and buy their own for real money. Formal attempts to block the movement of energy prices depend on no players stepping out of line, and there is no way to force the cooperation of players who want CE and have the Crowns to buy it.

But Crystal Energy costs more than it costs to adventure
This is unlikely. If no player could earn back in Crowns in 10 levels what 100 CE cost, then the buyer's market for CE would become dramatically limited. (There are other reasons to buy CE - to adventure for heat and materials, to craft, to form a guild, etc., where Crown return may not be considered, but many players are trying to earn more crowns and they would not buy, significantly slowing the market.)

However, deeper levels pay better than shallower levels in general, and some levels in particular pay better. The higher the price of CE goes, the more players there will be who do not earn enough to recoup in crowns the cost of their energy.

But when the price of Crystal Energy goes up to 25,000 Crowns (or some such figure) -nobody- will be able to afford it
There's no reason to believe the market will go up to any astronomical level, as the less affordable CE becomes the more people will refuse to buy it for Crowns (whether they quit the game, buy it for cash, or limit playtime to what Mist Energy allows). It is, however, possible that it will eventually not be possible to play indefinitely for the crowns earned on a run, or even for the Crowns earned on a run and the Crowns earned from selling all materials and minerals gathered on the run. If that were to happen, then free players would only be earning more crowns when they were using Mist Energy.

This is terrible! Three Rings should use (subscription / cash shop / merchandising) instead!
The game has been in development for 4 years and Three Rings already has experience and success with this business model. In fact, the microcurrency model on Puzzle Pirates has been vastly more successful than the subscription model that is also offered on the same game. Spiral Knights has been developed with a business plan as well as a game design in mind, and complaints from non-revenue generating players are extremely unlikely to change a years-long business plan. Indeed - while I'm not privy to their internal affairs - it is quite possible that they are legally obligated to pursue the business model if it was the plan promised to investors.

Why did you write this, when there are already twenty threads?
There are twenty threads in General Discussion full of misinformation, name-calling, and arguments that are going in circles, all of which start with a demand to lower the price of CE (except for one that starts with a demand to increase the price of CE, but that was satire.) By posting this in the New Players Forum, I hope to make most of the useful information available without wading through such threads, and also, if I did a good enough job explaining these points, I hope that some of this text may be placed in the wiki. (And in fact, I give permission for anything in this post to be placed without attribution into the spiral knights wiki.)