More firms quit energy market
AROUND 1.5 million customers have seen their energy supplier go out of business this month after Avro Energy and Green Supplier Limited became the latest to announce their exit from the market.
Ofgem said that it would ensure that a new supplier was appointed to take over Avro’s 580,000 domestic gas and electricity customers and Green’s 255,000 households.
Between them they supply 2.9% of the UK’s domestic energy customers, Ofgem said.
Avro becomes the biggest of a series of recent failures in the energy market, sparked by a massive spike in gas prices in recent weeks.
Do to the increases companies have promised to sell gas to customers for a less than it currently costs to buy from producers, putting them in a difficult position if they did not buy ahead as a form of insurance.
Avro and Green’s failure come after energy companies PFP, MoneyPlus, Utility Point and People’s Energy all exited the supply market in just over two weeks. Last month HUB Energy, which had just 6,000 customers, also stopped trading. Together all the recently failed companies account for more than 5% of the market, around 1.5 million customers.
Like when other companies fail, Ofgem said that households can keep using gas and electricity as before while the regulator tries to find them a new supplier.
“I want to reassure customers of Avro Energy and Green Supplier Limited that they do not need to worry,” said Ofgem director of retail Neil Lawrence.
“Under our safety net we’ll make sure your energy supplies continue. If you have credit on your Avro Energy or Green Supplier Limited account this is protected and you will not lose the money that is owed to you.”
Customers should sit tight and not switch to a new supplier until they are contacted by whoever Ofgem appoints to take over their account. However many companies will be reluctant to take on hundreds of thousands of new customers, a costly and time-consuming process. One source at an energy supplier said: “Like three-quarters of the market we’ve already bought energy for our customers in advance. We will now have to look at absorbing customers from these failed companies and buying more energy at eye-watering prices and that will be very tough.”
Earlier the Government agreed to potentially pay tens of millions of pounds to subsidise a major USowned fertiliser manufacturer to ensure the supply of CO2 for the food sector continues amid the energy crisis.
A deal brokered by Business Secretary Kwasi Kwarteng will see the UK Government provide “limited financial support” towards CF Fertilisers’ running costs to prevent a food supply shortage at Britain’s supermarkets.
The agreement will be in place for three weeks while the “CO2 market adapts” to the surge in global gas prices, according to the Department for Business, Energy and Industrial Strategy (Beis).