Energy crisis: Orbit and Entice become the last suppliers to go bankrupt

Entice Energy and Orbit Energy became the last gas and electricity suppliers to go bankrupt, bringing the total number of collapses to 25 since August.

Macclesfield-based Entice and London-based supplier Orbit both said they would go out of business on Thursday in the latest development of an ongoing crisis in the UK energy market.

In a letter to customers, Orbit blamed Ofgem and the government for its collapse. The company said it had always been a “well-managed supplier” who took a “cautious approach” to purchasing power, but could no longer survive because of the way the price cap on energy has been applied.

“Unfortunately, the UK government and our regulator Ofgem expect us to sell energy at a price well below the purchase cost, making operation unsustainable,” the company said.

“It is with a heavy heart that I write to you, our loyal customers, to let you know that, despite our best efforts, the energy supply to UK households is no longer sustainable.”

Customers will be transferred to other suppliers and will not see an interruption in their gas or electricity. Credit balances will also be protected, energy regulator Ofgem said.

Suppliers have been hit by soaring gas prices, with little respite expected until spring 2022.

The energy price cap, which is set at a rate equivalent to £ 1,277 per year for the average household, means suppliers are wasting money on many of their customers. The cap is not expected to be revised until early next year, with the new rate being introduced on April 1.

Experts predicted that only 10 companies could survive that long unless the government intervenes more in the market. At the start of 2021, there were 71 energy suppliers in the UK.

Last week, Ofgem ordered five energy suppliers to pay their contributions to a program to support renewable energy production. Orbit missed his payment by more than £ 451,000.

Business Secretary Kwasi Kwarteng has singled out “poorly run” businesses, saying in September that the government would not “throw taxpayer money” at suppliers who have gone bankrupt due to poor leadership.

On Wednesday it was revealed that the government had earmarked £ 1.7bn to ensure Bulb – the UK’s seventh largest supplier – can continue to supply energy to its customers after directors are appointed this week.

The funding commitment means each of Bulb’s 1.7 million customers are backed by £ 1,000 of public money as Teneo special trustees seek a long-term solution that could mean a sale of the business or a transfer of customers to other suppliers.

Tax and advisory firm Blick Rothenberg said the government must do more to support small suppliers.

“The government must consider putting in place a special business loan program for small suppliers or resetting the price cap for a limited period, otherwise more energy companies will fail,” said Simon Rothenberg, director of the company. .

“A special loan program would be better to leave things to the last minute and then have to run a business through a special administration.

“If the government does not step in, the energy market will only revert to the Big Six and consumers will not have the flexibility they have enjoyed so far.”

Ofgem and the government have been contacted for comment.

Author: admin

Leave a Reply

Your email address will not be published. Required fields are marked *