Four more UK energy suppliers go bankrupt due to high gas prices | Energy industry
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Four more energy providers have gone bankrupt in a single day as historic highs in the gas market continue to trickle down to the UK energy market amid new fears that Russia is limiting supply in gas from Europe.
Energy regulator Ofgem said the collapse of four small energy providers on Tuesday would leave around 24,000 households in need of a new supplier and bring the total number of bankrupt energy companies to 17 since it began. September, affecting more than 2 million households.
The wave of failures follows soaring global energy market prices due to a sudden surge in demand for gas as economies have begun to ignore restrictions linked to the Covid-19 pandemic. Gas markets have hit record highs in recent weeks, leading to one of the biggest increases in home energy bills and fears of a cost of living crisis this winter.
Of the four UK victims, Zebra Power had the largest customer base and supplied power to 14,800 homes. Omni Energy supplied around 6,000 domestic prepaid customers, while AmpowerUK had around 600 UK customers and supplied 2,000 other households abroad. MA Energy had around 300 foreign customers.
More energy providers are expected to collapse in the coming months as gas markets remain at near record highs and providers are forced to shoulder the higher costs without raising their tariffs above the regulator energy price cap.
Consumer charity Citizens Advice said struggling households would end up paying the price “with the uncertainty, inconvenience and ultimately higher bills” as suppliers continue “to fall like dominoes.”
Gillian Cooper, Energy Manager at Citizens Advice, said: “Last week Ofgem explained how it intends to ‘raise the bar’ for supplier standards and improve their short-term resilience. This is a positive step, but it is clear that the existing rules and their application have not been enough. “
Cooper added: “In the longer term, Ofgem will need to do more to ensure that businesses are financially sound and provide good customer service. This should include protecting people from the loyalty penalty, which before the cap allowed companies to take advantage of those that didn’t or couldn’t change.
The energy regulator presented “bold action” plans last week to speed up changes to its price cap, which protects around 15 million homes from unfair energy bills, following growing calls suppliers to relax the cap so that market increases can be exceeded. to households earlier.
The overhaul of the price cap has come as gas prices, which are more than three times higher than at the same time last year, may resume their ascent as temperatures drop across Europe and Russia is reducing gas exports to Europe.
Gas flows from Russian state gas giant Gazprom, which supplies around a third of Europe’s gas, declined significantly over the weekend and on Tuesday the company refused to offer additional gas supplies to Europe. from January, when demand is often at its highest for the winter.
The slowdown in gas exports has rekindled fears over winter energy suppliers despite a direct order from Russian President Vladimir Putin for Gazprom to focus on filling its European gas storage facilities from the November 8, when Russian home storage is expected to be filled.
Russia’s decision not to turn on its gas taps to allow additional supplies to Europe from January also defies calls by the world’s energy watchdog, the International Energy Agency, which said last month that Russia should help ease market prices by increasing gas exports to Europe this winter.
Moscow has denied withholding gas supplies to Europe via its pipelines passing through Ukraine and Poland to pressure German regulators to approve gas shipments via the new Nord Stream 2 pipeline across the Baltic Sea to Germany.
But its decision to send only contracted volumes despite strong demand for additional gas supplies is likely to raise market prices for gas across Europe, helping Russia to charge more for its exports of gas. hydrocarbons.
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