Many energy firms are facing an uncertain future as a sudden rise in wholesale gas prices threatens to reshape the UK sector.
Industry experts predict dozens of energy companies could go to the wall in 2021, reducing the number of suppliers to as few as 10.
This is a significant drop from the start of the year, which saw 70 firms supplying energy to UK households, as the hike in gas prices grips tight.
Wholesale gas prices have risen 250% since January 2021 and 70% in August alone, according to data gathered by industry group Oil & Gas UK.
These are the energy companies to have gone bust, those in trouble and what the government has said amid rising wholesale gas prices.
Why are gas prices rising?
An imbalance between supply and demand has seen the price of gas skyrocket.
There is a high global demand for gas, with the UK's needs increasing as the colder weather set in through the winter months, while a shortage of supply.
Planned maintenance, reducing the nuclear power outage of the UK by a fifth, as well as lower solar and wind renewable energy generated has also contributed.
Initially, companies were shouldering that financial burden due to the government's energy price cap which limits the cost firms can pass on to its customers.
Yet the cap has now risen by £139 a year, from £1,138 to £1,277 a year, from 1 October 2021 and will be reviewed again by Ofgem in six months’ time.
Who are ‘the big six’ energy companies?
A collection of well established energy companies are known as 'the big six'.
They are the biggest energy suppliers in the UK and have been dominant in the sector for some time - but they are not adverse to change with many mergers having taken place.
Traditionally, the big six were British Gas, EDF Energy, E.ON, npower, Scottish Power and SSE.
Though SSE is owned by OVO, npower is owned by E.ON and Scottish Power is owned by Iberdrola and not all the companies supplying gas to the UK are based in the UK.
Which energy companies have gone bust?
Pressure continues to mount on many energy firms, brought on by the rise in wholesale gas prices coupled with the energy price cap.
It has proved too much for some companies in recent weeks, with 24 UK suppliers biting the dust unable to find a way forward amid rising costs.
The companies are:
- Entice Energy, including Entice Energy Supply Limited and Simply Your Energy Limited (25 November)
- Orbit Energy Limited (25 November)
- 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, Entice Energy supplies around 5,400 domestic customers and Orbit Energy supplies around 65,000 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 of the firms to have gone bust, with industry regulations ensuring energy supply will continue for affected customers.
Which energy suppliers are in trouble?
A handful of the UK's energy suppliers are at risk of going bust in the next week, according to reports.
Bulb Energy, the UK's seventh largest energy company, is one of those suppliers looking for extra funds to bring order to the balance sheet, as it searches for a bailout.
Government chiefs have been in talks with representatives from the energy industry to understand the widespread impact the rise in gas prices is having on households and businesses.
Bulb, with 1.7 million customers and around 6% of the market share, made the decision to enter administration though would protect its existing members. It will receive financial support to the tune of £1.7bn from the UK taxpayer.
A statement read: “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.”
The company is expecting a high number of calls, so advises members to only call if it is an emergency.
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