Fears for major energy f irm on edge of collapse
FEARS are mounting for Britain’s seventh biggest energy firm, Bulb, amid reports it will collapse as early as next week.
The company, which has around 1.7million customers, is the latest to be pushed to the brink by soaring energy prices which have already forced the closure of 14 suppliers.
And it came as energy regulator Ofgem warned that seven other firms may also face action after falling behind on payments required to support the UK’s switch to green energy.
The seven, which serve around 500,000 customers, owe a combined total of £17.9million. Ampower and Whoop Energy have been told to pay by Monday or risk losing their licences.
The other five – Together Energy, MA Energy, Delta Gas and Power, Entice Energy and Neon Reef – could also face further orders.
Bulb’s demise would mark the largest failure to date in the ongoing energy crisis – coming weeks after Avro Energy, which had 580,000 customers, went bust.
Yesterday, Bulb revealed it was in talks with multiple parties to try and secure additional funding to guarantee its future. However, hopes are said to be fading, according to Sky News, with ministers, officials and Ofgem representatives allegedly making ‘contingency plans’.
The crisis comes amid firms’ concerns over the energy price cap, which stops them from passing on a sudden surge in wholesale gale and electricity prices. The cap rose to £1,277 earlier this month – an annual rise of £139.
The Government has backed the price cap, insisting it is a vital consumer protection that could prevent households from paying as much as £2,000.
However, Ofgem said yesterday that it is prepared to look at how it works. Currently, the figure changes just twice a year – April and October – but this be could be increased to every three months to better reflect price volatility.
All of Bulb’s electricity comes from renewable sources such as windfarms but it also buys natural gas on the wholesale market, offsetting the carbon emissions by supporting eco-projects, such as planting trees.
Rival suppliers, such as Octopus and Ovo Energy, have already emerged as potential buyers for Bulb. However, if rescue talks are unsuccessful, it will be forced to close with all its customers being switched to a new supplier.
A Bulb spokesman said discussions were ‘making good progress;, however it added that it expected the Government to ‘monitor’ the effect on the industry.
Writing to suppliers yesterday, an Ofgem spokesman acknowledged that the ‘unprecedented rise’ in energy prices had ‘changed the perception of risk and uncertainty in the market’.
‘Hopes are fading’