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Business News

Energy watchdog Ofgem braced for fresh wave of supplier collapses

today12/10/2021

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Ofgem, the energy regulator, is braced for a fresh wave of supplier collapses this week as the crisis engulfing the industry continues to accelerate.

Sky News understands that at least four suppliers were in talks with Ofgem on Tuesday about entering its Supplier of Last Resort (SOLR) system in a development expected to add several hundred thousand households to the toll of those impacted by soaring wholesale gas prices.

Industry sources said the decision of at least some of those four companies to cease trading could be announced as early as Wednesday.

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Twelve UK energy providers have collapsed

They are thought to include Pure Planet, which Sky News revealed at the weekend had been left marooned by backer BP’s likely decision to terminate financial support to the company.

An executive at one of the UK’s biggest energy companies said they understood that the other suppliers that were about to enter the SOLR mechanism were significantly smaller than Pure Planet in terms of customer numbers.

A Pure Planet spokesman said at the weekend that it had 250,000 customers.

Analysts named Ampower, Zebra Energy and Neon Reef among those that were potentially at risk of collapse.

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In total, more than 1.7 million customers have found their energy supplier switched as a result of the Ofgem-run SOLR process since the start of August, with large players including Centrica’s British Gas, EDF Energy and Octopus Energy all picking up customers in this way.

Among the companies which have collapsed have been Igloo Energy, Utility Point and Green Energy.

Avro Energy, with 580,000 customers, was the biggest to succumb during the current crisis.

Ofgem has lined up restructuring experts from Teneo to act as special administrator to a large supplier if it cannot be resolved through SOLR.

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Energy UK expecting fuel companies to go bust

There is now an expectation that the energy price cap, which rose to £1309 for prepayment customers at the start of this month, will have to be hiked substantially again when it is reviewed next in the spring of 2022.

Kwasi Kwarteng, the business secretary, has repeatedly insisted in recent weeks that the cap is non-negotiable despite the protests of some suppliers.

British Gas remains the domestic market leader with about 7 million customers, while E.ON Next, the new brand which combines customers from E.ON and npower, has around 5.2 million residential customers.

None of the companies contacted by Sky News would comment on Tuesday, while Pure Planet and Ofgem both declined to comment.

 Sky News

© Sky News 2021

Written by: Rother Radio News


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today12/10/2021