Energy crisis: more suppliers fizzle out after the rise in wholesale costs | Business news



The demise of two other energy companies has been confirmed as the rise in gas wholesale costs this year has driven bills for suppliers and households alike.

Sky News announced on Tuesday that up to four suppliers were in discussions with the regulator about joining their Supplier of Last Resort (SOLR) mechanism.

Pure Planet and Colorado Energy announced that they had ceased trading Wednesday evening, and Ofgem later confirmed that a new supplier would be assigned to their respective customer bases in the coming days.

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How are other countries dealing with rising energy prices?

BP-backed Pure Planet, which has 235,000 households, got into trouble when the energy giant refused additional funding.

Colorado Energy only had 15,000 customers.

The regulator’s statement reads: “Under Ofgem’s safety net, customers will continue to be supplied with energy and the funds that domestic customers have deposited into their accounts will be protected where they are on balance.

“Domestic customers are also protected by the energy price cap when switching to a new provider.

“Customers of these suppliers will be contacted by their new supplier, who will be selected by Ofgem.”

The decline of Pure Planet and Colorado means 14 small suppliers have collapsed this year – 11 of them in the last six weeks.

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Energy UK expects the fuel companies to go bust

They have been hit by business models that expose them to short-term raw energy supply contracts that have skyrocketed due to various supply bottlenecks across Europe – by more than 500% this year.

These include bottlenecks in gas storage facilities after a cold end of last winter and strong competition from Asia to replenish stocks.

In the UK, poor weather conditions have increased demand for wind generation and a fire on an electricity interconnector with France in Kent last month also contributed.

The consequences of the energy crisis are far-reaching, even before winter comes.

Consumer experts say – for the first time ever – that getting below the energy price cap is currently the best way to avoid instant bills going up.

Households are automatically switched to a so-called default tariff after signing a fixed collective agreement.

It averages £ 1,277 for an annual bill, while new 12 month fixed rate contracts are currently more than double that.

However, Ofgem has warned that the cap is expected to rise sharply in April after the next review to reflect the rise in wholesale costs.

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Kwarteng seeks help for intensive energy consumers

The business secretary Kwasi Kwarteng has asked for financial help in support of high industrial energy consumers – such as steel and chemical plants – while warning that unprecedented cost increases will force them to close.

The government had previously reached an agreement with a US company to restart fertilizer production at a plant on Teesside secure important CO2 deliveries – a by-product of the manufacturing process.

Neil Lawrence, Director of Retail at Ofgem, commented on the collapse of the recent energy company: “Ofgem will be picking a new supplier for you by now.

“As usual, you can rely on your energy supply. We will inform you when we have selected a new supplier who will then contact you regarding your tariff.

“Any customer who has concerns about paying their energy bill should contact their supplier for access to the available support services.”



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