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Is the UK Going To Face a Harsh Winter?
image credit: Agata Bertolini / Scopio
More power suppliers go bust
The UK is facing a very difficult winter for energy supplies to customers. Many of the country's small energy suppliers have gone bust, not having enough capital to hedge purchases of energy on the market as gas prices rose. On Monday, one of the larger suppliers, Bulb, went into administration, leaving the government to pick up the pieces. Bulb was the seventh-largest company and had over 1.7 million customers, so this is bound to cause problems.
This is on top of the twenty that have collapsed since September. Another eleven are teetering on the brink of failure, according to accountants Price Bailey, who checked the credit risk scores of all domestic electricity and gas licensees registered with Ofgem, the regulator for electricity and gas markets. They found that these were deemed to be at “Maximum Risk.”
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So far the winter has been mild in Britain, but that could change. A cold snap would be very grim, especially as the government sold off gas storage, and the country only has about three days worth in reserve, less than other European countries. A typical household bill could rise to over $2600 (£2,000) next year, up from $1600 (£1,277) currently under the energy price cap. But eleven more suppliers closing would send bills up even more. This is going to hit pensioners and those on limited incomes hard.
These circumstances are going to make for some tough decisions for energy managers if there are power shortages. Nationalisation of the suppliers has been talked about, but the current government are strongly against this kind of measure.
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