Bulb Energy administration: has UK supplier gone bust - why company is facing collapse amid rising gas prices
Wholesale gas price hike has caused more than 20 UK energy firms to go bust in recent weeks - is Bulb still trading?
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As gas prices continue to rise, many energy firms are facing an uncertain future.
A significant surge in wholesale gas costs brought on by a high global demand has come at a time when supply has been reduced.
It is due to planned maintenance work, including a fifth of the UK's nuclear power stations currently offline, as well as reduced solar and wind energy outage.
While the energy price cap - a limit energy firms can charge its customers each year - saw many companies shoulder the financial strain in the short term.
It comes as the UK prepares for its coldest months of the year with many households likely to use more energy heating their homes and using credit built up over the summer.
Here's a look at which UK energy companies have gone bust, those that appear to be in trouble - and if Bulb Energy is one of the firms looking for help from industry or the government.
Is Bulb Energy going bust?
Britain's seventh biggest domestic energy supplier Bulb has entered a special administration and will receive financial support to the tune of £1.7bn from the UK taxpayer.
A statement on its website reads: “We’ve made the difficult decision to support Bulb being placed into special administration. This process is designed to protect Bulb members, ensuring there’s no change to your supply and your credit balance is protected.”
And continued: “Special administration is designed to allow Bulb to continue to operate as usual so you don’t need to take any action. Your tariffs are not changing, and the price cap applies to all consumer energy tariffs. If you pay for your energy by top up, your top ups will continue to work as normal. If you’re in the process of switching to or from Bulb, your switch will continue.”
Bulb, which has around 1.7 million customers and 6% of the UK market share, has been struggling for weeks since the wholesale price of gas soared in August.
Reports first surfaced in the Financial Times that Bulb, founded in 2013 and positioned itself as a renewable energy supplier, was seeking a bailout to survive the winter months.
Which energy companies have gone bust?
Many energy firms are experiencing mounting pressure brought on by the rise in wholesale gas prices.
Industry group Oil & Gas UK have found that wholesale gas prices are up 250% since January with a 70% rise since August.
The government's energy price cap has relieved consumers of the immediate financial burden, which is being shouldered by the companies.
But not all of the UK's energy suppliers can take on that extra weight, which has resulted in many companies biting the dust in recent weeks.
The companies to have gone bust include:
- Neon Energy Limited (16 November)
- Social Energy Supply Ltd (16 November)
- CNG Energy (5 November)
- Omni Energy Limited (2 November)
- MA Energy Limited (2 November)
- Zebra Power Limited (2 November)
- Ampoweruk Ltd (2 November)
- Bluegreen Energy Services Limited (1 November)
- GOTO Energy Limited (18 October)
- Daligas Limited (14 October)
- Pure Planet (13 October)
- Colorado Energy (13 October)
- Igloo Energy (29 September)
- Symbio Energy (29 September)
- Enstroga (29 September)
- Avro Energy (22 September)
- Green Supplier Limited (22 September)
- Utility Point (14 September)
- People’s Energy (14 September)
- PFP Energy (7 September)
- MoneyPlus Energy (7 September)
- HUB Energy (9 August)
According to Ofgem, Neon Energy Limited supplies around 30,000 domestic electricity customers, and Social Energy Supply Ltd supplies around 5,500 domestic customers
Neil Lawrence, Director of Retail at Ofgem, said: “Ofgem’s number one priority is to protect customers. We know this is a worrying time for many people and news of a supplier going out of business can be unsettling.
“I want to reassure affected customers that they do not need to worry: under our safety net we’ll make sure your energy supplies continue. If you have credit on your account the funds you have paid in are protected and you will not lose the money that is owed to you. Ofgem will choose a new supplier for you and while we are doing this our advice is to wait until we appoint a new supplier and do not switch in the meantime. You can rely on your energy supply as normal. We will update you when we have chosen a new supplier, who will then get in touch about your tariff.
“Any customer concerned about paying their energy bill should contact their supplier to access the range of support that is available.”
New suppliers have been found for most firms to have gone bust, with industry regulations ensuring energy supply will continue for affected customers.
Why are gas prices rising?
A combination of factors fronted by a high global demand have seen gas prices soar of late.
Planned maintenance work on electricity plants has meant around 20% of the UK’s nuclear power stations are currently offline.
While a dip in the energy produced from solar and wind sources, due to recent weather, has also played a part in the balance between supply and demand.
Households have been protected from shouldering the immediate cost by the government’s energy price cap - the maximum price customers can be charged.
Though the cap is set to rise by £139 a year, from £1,138 to £1,277 a year, starting from 1 October 2021 and will be reviewed again by Ofgem in six months’ time.
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