Four UK energy suppliers go under in a single day
Four UK energy suppliers have gone bust in one day as gas market highs hit the region’s energy market.
Since the start of September, 17 energy companies have collapsed amid fears that Russia could curb gas supplies to Europe.
Energy regulator Ofgem, said the collapse of four small energy suppliers on Tuesday November 2 would leave around 24,000 households in need of a new supplier.
The energy company collapses come as global energy market prices surge following a rising demand for gas as Covid-19 restrictions around the world begin to ease.
Gas markets have hit record highs in recent weeks, resulting in sharp increases in home energy bills.
The biggest of the four companies was Zebra Power which supplied 14,800 households with energy, while Omni Energy supplied around 6,000 domestic pre-payment customers. AmpowerUK had around 600 UK customers and supplied a futher 2,000 overseas households and MA Energy had around 300 overseas customers.
More energy suppliers are expected to collapse in the months ahead as gas markets remain heated, with suppliers shouldering the higher costs without breaching the regulator’s energy price cap.
Energy regulator Ofgem set out plans for “bold action” last week to fasttrack changes to its price cap which protects around 15 million households from unfair energy bills, following growing calls from suppliers to make the cap more flexible so that market increases can be passed on to households sooner.
Gas prices are more than three times higher than this time last year, and could continue to climb as temperatures plunge across Europe and Russia squeezes gas exports to Europe.
Gas flows from Russia’s state-owned gas giant Gazprom, which supplies about a third of Europe’s gas, dropped significantly at the weekend and on Tuesday the company declined to offer extra gas supplies to Europe from January, when demand is often at its highest for the winter.
The slowdown in gas exports has reignited fears over the winter’s energy suppliers despite a direct order from the Russian president, Vladimir Putin, for Gazprom to focus on filling its European gas storage facilities from 8 November, when Russian domestic storage should be filled.
Global energy watchdog, the International Energy Agency, said last month that Russia should help to ease market prices bu boosting gas exports to Europe this winter.
Moscow has denied it is withholding gas supplies from Europe via its pipelines through Ukraine and Poland to exert pressure on German regulators to approve gas shipments through the new Nord Stream 2 pipeline across the Baltic Sea to Germany.
But its decision to send only contracted volumes despite the strong demand for extra gas supplies is likely to raise gas market prices across Europe, helping Russia to charge more for its hydrocarbon exports.