Four more UK energy suppliers go bust

Four more energy suppliers are now bust in only a single day due to record high gas market prices tearing through the UK’s energy market.

Ofgem ,the UK’s energy regulator, has explained that 24,000 households are in need of a brand new energy provider due to the fall of 4 small energy companies on Tuesday. This means the whole number of energy companies that have gone bust since August is now 18. This crisis means that 2 million households will now be affected as a result. 

Supplying 14,800, Zebra Power is the energy provider with the largest customer base and has the foremost casualties overall.

Omni energy supplied around 6,000 domestic prepayment customers. 

Finally, there is AmpoerUk which consists of around 600 UK customers and provides for an additional 2,000 overseas households.

Firms are finding it difficult as they established their customers with cheap fixed deals meaning they were unable to stay afloat during climbing gas prices. 

Enstroga, Igloo Energy and Symbio Energy were the newest energy suppliers to cease trading.

It is predicted that even more energy companies are due to crumble within the following months. Thanks to the extremely high costs, suppliers are going to be unable to extend their tariff above the regulatory energy price cap. 

According to Ofgem, consumers switching to a replacement supplier would even be protected by the energy price cap. However the tariff of a new supplier agreed to by Ofgem could mean customers suffer a more dearer deal than their previous supplier that went bust. Perhaps larger companies taking on this surplus of households could mean they will suffer a similar fate to smaller suppliers. 

Consumer protection might result in a higher energy bill for some individuals. The government said it will be looking to lend money to larger energy firms to aid in the take-on of stranded customers.

By limiting consumers’ charges for default tariffs, the regulator’s price cap covers 15 million homes throughout England, Wales and Scotland. Still these household energy bills have risen by 12% since the beginning of the month.

Energy suppliers face financial pressure as a result of “an unprecedented rise” in global gas prices, according to Ofgem. Lower gas supplies and increased demand with a colder winter in Europe last winter also contributed to the recent surge in wholesale prices. 

There has also been an increased demand in Asia ,specifically China, for liquefied natural gas. These factors have helped raise wholesale gas prices throughout the world. Ever since January prices have risen by 250%.

Although gas prices are rising all over Europe it may appear that the UK is getting hit particularly hard. 

However there are reasons explaining this:

Firstly, the UK is amongst Europe’s biggest consumers of fossil fuels,85% of homes use gas central heating, and it is also liable for a third of the country’s electricity. 

Secondly, renewable energy supplies are down because it has been the least windy summer since 1961. Over the last week, wind provided just 9% of power for England, Wales and Scotland. 

Finally, there was recently a fire at the National Grid site in Kent which caused a power cable, supplying electricity from France, to shut down.

Energy prices are having an effect on UK businesses with many companies facing a considerable rise in their bills. This means businesses will need to lessen or halt production. They may even need to cease trading entirely which could result in employees losing their jobs.

Furthermore businesses could hand the pressure of the bills onto customers by demanding higher prices for their services.

In addition energy orientated industries are particularly vulnerable but any business that must pay for energy bills – to simply warm an office – is in danger.

Ofgem’s Retail Director Neil Lawrence said the agency’s top priority was to protect customers.

“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.”

“We will update you when we have chosen a new supplier, who will then get in touch about your tariff,” added Mr Lawrence.

Until a replacement supplier is appointed, affected customers should not switch providers.

Instead of looking for a less expensive deal, households should try to improve the energy efficiency of their homes. The Energy Saving Trust states that changes to our homes and habits could counteract the current price rises.

“We will update you when we have chosen a new supplier, who will then get in touch about your tariff,” added Mr Lawrence.

Despite the collapse of an energy company, consumers will still receive gas or electricity. It should take a few weeks for Ofgem to transfer your account to a brand new supplier. You will then hear from your new supplier regarding your new account.

In the meantime check your current balance, download any bills you may have and take a picture of the reading on your meter.

Citizens Advice says that it won’t be necessary to cancel your direct debit immediately. Rather cancel it only when your new account is set up.

Credit is protected and your money will be paid back. In the event that you owe money to your old supplier that money will be received by your new energy supplier instead.

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