High gas prices have caused a series of bankrupt energy companies in the British market. Five have already died in the past month and another four suppliers to private individuals could follow before the end of September. The energy sector is now consulting with the cabinet and regulator Ofgem about emergency measures.
With winter approaching, the UK energy sector will look very different, according to consultant Baringa Partners. In the British media, the company expects that at the most ten energy companies will still exist at the end of the winter, compared to almost seventy now.
The so-called cap had to end rip-off by energy companies
Consumers are protected by the government through maximum prices, which must keep energy bills affordable. But now that the gas price is rising rapidly and suppliers are unable to pass the price increases on to their customers, many of them are in trouble.
The maximum prices applicable to the supply of electricity and gas were introduced in the United Kingdom almost three years ago. The so-called cap was, in the words of then Prime Minister Theresa May, an end to “rip-off” by energy companies. The maximum price is set twice a year by regulator Ofgem and will increase by 12 percent next month. But that frequency is insufficient in view of the current rapid price increase.
Minister Kwasi Kwarteng, who is responsible for energy, among other things, announced crisis consultations with the energy companies and the regulator this weekend. Energy companies have already asked London for billions in support. Customers who, as a result of bankrupt suppliers no longer receive gas and electricity, should be offered a separate institution (a kind of bath couch) must be accommodated.
This attitude – an idea of the industry – should prevent people without a supplier from being able to get a contract anywhere because they are loss-making for energy companies. With the current maximum prices and the increased tariffs for gas and electricity, companies would invest an average of about 300 pounds (converted about 350 euros) per year on such a customer.
Even nationalization of troubled energy companies is Financial Times not excluded. Prime Minister Boris Johnson called the problems “temporary” on Sunday but said the government was “doing what it can” to help the energy sector and ensure energy supplies continue. Some companies have asked London to temporarily lower the tax on energy bills, so that there is more room for price increases.
Also read: EU braces for rising energy prices
Gas prices are rising at an unprecedented rate throughout Europe. One reason for this is the low gas supply in many countries. The buffers are far from being filled with winter approaching. In parts of Europe, this is partly due to the cold spring. As a result, people have used gas to heat their homes for longer.
Furthermore, many gas buffers (underground gas fields) in the United Kingdom still require maintenance, after earlier adjustment due to corona. A third cause of the limited gas stock is the relatively limited gas supply from Russia, which benefits from a higher price. At the same time, global demand for natural gas is high, as it is an important fuel for many countries in the transition to a more sustainable economy.
Gas price clears up energy companies in England
Source link Gas price clears up energy companies in England