UK’s seventh-largest gas and electricity firm on brink of going bust
The government is accelerating plans to deal with the potential collapse of Bulb, the UK’s seventh largest energy supplier, according to a report.
If Bulb were to collapse, it would mark a deepening of the crisis engulfing the retail energy sector which has seen 14 suppliers go bust in recent weeks due to soaring wholesale prices.
With 1.7 million customers, Bulb is more than three times as large as the biggest supplier to fail so far, Avro Energy. Regulator Ofgem would need to find new suppliers for Bulb’s customers with few, if any, companies thought to be large enough to take them all on.
That would likely mean that Ofgem and the government will be forced to trigger the Special Administration Regime, under which external administrators are brought in to run a supplier and ensure uninterrupted services for customers while new arrangements are sought.
Sky News reported on Friday that Bulb could cease trading as soon as next week. Industry sources told Sky that it was “highly unlikely” Bulb would survive through November without new funding.
A Bulb spokesperson said on Friday: “Our discussions with multiple parties to secure additional funding continue to make good progress and we’re encouraged by the drop in wholesale energy prices.
“We expect the government to monitor wholesale prices and their effect on the whole industry, but ministers and Ofgem have been clear we must emerge from the energy crisis with a competitive and innovative market, rather than a return to the oligopoly of the past.”
Suppliers have been hit by a huge increase in wholesale gas prices this year which they have been unable to pass on in full to customers who are on fixed-rate tariffs or are covered by the energy price cap.
The department for Business Energy and Industrial Strategy has been contacted for comment.