BULB GOES OUT
New fears for energy sector as Britain’s seventh biggest supplier goes bust
BRITAIN’S seventh biggest energy company Bulb collapsed into administration yesterday amid ‘dark times’ for the industry.
It is being nationalised on a temporary basis after surging wholesale gas prices meant it made big losses on each customer.
Special administrators are being appointed to run the company, which serves 1.7million households. Experts said supplies of gas and electricity are safe, but customers face increases in bills – potentially more than £350 a year – with more to come. The cost of
‘Dark times for the industry’
running Bulb is expected to hit millions of pounds which will be covered by taxpayers or, more likely, passed on to every household through a levy on bills. Wholesale prices have surged 250 per cent this year, driven by high demand as the global economy recovers from the pandemic amid a squeeze on supplies to Europe from Russia.
The collapse of Bulb is seen as a turning point for the crisis-hit industry which has already lost 23 smaller firms, with more on the brink. Analyst Robert Buckley, of Cornwall Insight, said it was the biggest energy failure in 20 years amid ‘dark times’ for the sector.
He added: ‘The failure of Bulb highlights the stress suppliers have been under this autumn.’ Bulb blamed the Government’s price cap, which protects consumers, for its failure. Companies are paying much more for gas and electricity than they are allowed to charge customers.
The cap is £1,277 a year for a typical user. Lenders and investors have withdrawn support, forcing Bulb’s parent company, Simple Energy, into administration. Its businesses in France, Spain and the US will continue trading.
Previously customers of collapsed firms have been swiftly moved to a new supplier. In this case there is no realistic prospect of finding an alternative quickly because Bulb has so many users.
Instead the business will be run under a state-sponsored regime for a period in the hope that another energy firm will step forward. Gillian Cooper, of Citizens Advice, said: ‘When the country’s seventh largest supplier fails serious questions must be asked about the state of the market and how it’s regulated.
‘It’s clear reforms are needed to prevent consumers and taxpayers from paying the price for supplier failures in future.’
Lisa Barber, of consumer group Which?, said: ‘The collapse...demonstrates the seismic impact the energy crisis is having on the industry and millions of consumers.’ Justina Miltienyte, of price comparison website Uswitch.com, said over four millions households had seen their energy firm fail in recent weeks. She added: ‘This signals the tipping point of the UK energy crisis.’