Energy suppliers risk going bust ‘within 3 months’, firm warns

Energy suppliers will shut down “within three months” without immediate government support as bulk gas prices rise, the head of a firm has warned a quarter of a million customers.

Green Energy CEO Peter McGuire said the government had offered “no support” to struggling small firms, which were on the verge of financial collapse, despite the prime minister’s pledge to help them navigate a “difficult period”. .

Four small energy companies have already failed in recent weeks due to the sudden rise in gas prices around the world. Bulk gas prices in the UK have tripled this year following an increase in demand following the global economic recovery from the Covid-19 pandemic.

The business secretary, Quasi Quarteng, is currently locked in crisis talks with industry leaders to support energy firms threatened by price hikes. Mr McGir, however, accused the minister of prioritizing the future of large firms.

“You don’t even need to watch the next six months, I would say the next three months will be curtains for us. We will not be without any support,” he said Granthshala.

“Unfortunately we will exhaust all our options in terms of raising finance, unless there is a proposal from the government, which does not seem to be the case.

“We will have no option but to turn around the company. At this point in time it looks like the business secretary is very happy with that.”

Green was established in 2019 and now employs 185 employees. Mr McGir said his firm had repeatedly approached officials from the Department of Business, Energy and Industrial Strategy (BEIS) for assistance over the past few weeks, but had made no promises of support.

“It is very disappointing that the government is saying that there has been an energy crisis only in the last few days, but it is not so. This is the culmination of several factors leading to the pandemic,” he said..

“How could I – and other smaller suppliers – possibly have hedged for the lockdown in March last year? It’s not because I haven’t run my business sensibly, as some have suggested about smaller suppliers.

“We can’t buy energy in advance for the 20 percent uplift in energy for kids who will be sitting inside playing PlayStation or professionals who have been forced to work from home.”

There are currently around 70 energy suppliers in the UK, although industry sources have warned the BBC this could drop to ten by the end of the year.

When a supplier fails, energy regulator Ofgem moves customers to another retailer to make sure supplies continue and they don’t run out of money. A new supplier is then responsible for taking over any credit balances from a customer’s previous account.

Mr Quarteng has previously said that consumers will be protected from price hikes through the government’s cap on bills. However, Mr McGuire cautioned that the cap puts pressure on suppliers because they are not able to pass the increase in cost fast enough.

“What we offer may seem modest in terms of energy but we have a million customers. When you include all other smaller suppliers, you are talking about millions of people who will feel the financial impact of this,” he said.

“Many of our clients are on fixed-term contracts. As soon as they come out of these they may have to go to another supplier at a very high tariff rate.

“If someone cannot turn on their heating during the winter, people will die. Fuel poverty is already at an all-time high and I am concerned that the government is not doing anything.”

OGUK, which represents the offshore oil and gas industry, reported that wholesale gas prices have risen by 250 percent since January – up from 70 percent from August alone.

Mr McGir is one of 15 CEOs of small suppliers who signed an open letter to the prime minister and business secretary on Monday calling for “urgent discussions” to address the crisis.

It claims that current discussions about a support package “focus only on the largest energy suppliers in the UK”.

It further added: “We feel that our voices have not been heard, as suppliers of all different sizes. Yet we are all in the market together and experiencing the same situation, if financial aid lines. have not grown because of our size with access to

The letter also claimed that Ofgem is “currently inappropriate to regulate” the industry and accused them of “turning a blind eye to the market for selective monopolies and lack of competition”.

The rise in gas prices has been attributed to a number of factors, including a cold winter that caused stocks to plummet, high demand for liquefied natural gas from Asia and lack of supply from Russia.

Boris Johnson made clear on Thursday that the government was ready to take steps to avoid further failure of energy firms, but stressed that the supply crisis was likely to continue for a few months.

“I have no doubt that the supply issues will be easily addressed,” the prime minister said. “We are very confident in our supply chains.

“But in the meantime, we will work with all gas companies to do whatever we can to keep people’s supplies going, to make sure they don’t go out of business and to make sure they don’t go out of business.” We are going through the current difficult period.”

A statement from Offgame said: “Offgame continues to work closely with government and industry to ensure that consumers continue to be protected when global gas prices are high and will continue to address these issues at the Industry Roundtable.” will talk …