The UK’s 22nd energy supplier is already collapsing due to high wholesale prices

2021-11-22 17:11

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2021-11-22 17:11

The UK's 22nd energy supplier is already collapsing due to high wholesale prices
The UK's 22nd energy supplier is already collapsing due to high wholesale prices
/ bulb.co.uk

Bulb Energy, the seventh largest energy supplier in the UK market, announced on Monday that it will go under receivership, which in practice means bankruptcy. It is the 22nd company to withdraw from the market since September due to high energy prices.

Bulb Energy is by far the largest of the companies that failed to survive the increase in wholesale energy prices, with roughly 1.7 million customers, nearly as much as the remaining 21 combined. Until now, Avro Energy was the largest with 580 thousand. customers.

It will also be the first to be covered by a new recovery procedure known as a special administrative regime. It was created for a situation where an energy company goes bankrupt but is too big for its customers to be transferred to another company. While the managers work to conclude a restructuring agreement, find a buyer or transfer customers to other companies, its obligations will be guaranteed by the state treasury so that customers can continue to receive energy.

Ofgem, the UK energy regulator, has yet to formally request that Bulb Energy be placed under a special administrative regime, but is expected to do so in the coming days. The collapse of Bulb Energy is not a big surprise, as the company announced in September that it was trying to obtain a bailout from the state budget.

It was not even saved by the fact that from the beginning of October in Great Britain the maximum price level in the tariff for individual customers was raised. These caps protect customers from sharp increases in energy prices, but mean that energy companies cannot pass on higher wholesale costs to customers, forcing some – mostly smaller – companies to withdraw from the market.

With the surge in wholesale prices, especially for gas, which started in August, the UK has seen a wave of collapses from smaller energy suppliers – nine withdrew in September, four in October, and eight in November, not including Bulb Energy. This means that of the 49 energy suppliers that were on the UK market in July this year, almost half are gone.

From London, Bartłomiej Niedziński

Source:PAP

About Eric Wilson

The variety offered by video games never ceases to amaze him. He loves OutRun's drifting as well as the contemplative walks of Dear Esther. Immersing himself in other worlds is an incomparable feeling for him: he understood it by playing for the first time in Shenmue.

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