Dark Mode
Thursday, 19 May 2022
Logo
UK energy regulator says more suppliers may go bust due to high prices
Power-Cables/Pixabay

UK energy regulator Ofgem said on Thursday, more British energy suppliers could go bust because of continued high wholesale energy prices.


The Trust reported according to Reuters, some 12 energy supplies have already collapsed this year affecting more than 2 million customers. Nine folded in September, as they struggled to cope with record gas prices.


Ofgem Chief Executive Jonathan Brearley told the Energy UK conference: "Given the continued volatility in the market it is likely more suppliers will exit the market."


Britain's energy minister Kwasi Kwarteng told the conference the government would not bail out failing energy suppliers.


Power lines-Cables/Pixabay

Most energy suppliers hedge customer needs in advance but some firms, with less capital available, have struggled to keep pace with wholesale gas prices which have surged as much as 400% or more this year. They were up about 380% on Thursday.


Read more: UK house prices record highest rate of increase since 2007


A cap on household domestic electricity and gas bills, which came into effect in 2019, has limited the impact of wholesale prices for consumers Brearley said, but warned this will eventually need to rise to reflect the changes.


Brearley said: "(The cap) is designed to reflect fair costs and therefore will need to adjust over time to reflect the changes in fuel costs we are seeing today."


Read more: Boris Johnson pushes ‘level up’ message despite economic woes


He said the regulator had tightened rules on new entrants joining the energy supply market in the past few years but that it would seek to go further.


He said, without giving more details on what the regulator could do: "If we do see sharp and unethical practices, we will use the full extent of our powers."


Source: trust