UK Power Suppliers Halt Adding New Customers As Energy Crisis Worsens
There’s a growing risk that a bankruptcy wave of power providers is nearing as several small firms stopped accepting new customers Tuesday amid a worsening energy crisis, according to Bloomberg.
Ampower, Green, Igloo, NEO, and Utilita Energy posted notices on their websites earlier today that they weren’t accepting new customers. This comes as several weaker rivals have already gone bankrupt as natural gas and power prices surge to record levels, leaving power suppliers who sold energy at lower prices underwater.
We noted Monday, out of the 55 or so power suppliers, only six to ten will be left standing after the smoke clears. So far, five have gone bust since the start of August, which coincides with surging wholesale costs of natural gas and electricity.
“A lot of the smaller ones are probably going to go,” said Niall Trimble, managing director of consultant Energy Contract Co. “If you were planning to buy gas for 50 pence and it’s 150 pence, that’s a hell of a blow to your finances.”
Bloomberg Intelligence’s Patricio Alvarez said low inventories in Europe ahead of the winter season are primarily the triggers for U.K.’s energy crisis. Here’s more:
Low gas inventories in Europe, ebbing pipeline imports and strong Asian demand driving liquefied natural gas (LNG) cargo diversions form a constructive backdrop for regional wholesale gas prices into heating season. Tapering domestic output, competitive global LNG markets and increased gas burn for power generation amid carbon-price volatility may keep balances tight in 2022 as a post-pandemic recovery unfolds. A mild winter could ease prices from record highs, while piped supplies could improve from higher Norway volume and the potential startup of Russia’s Nord Stream 2 by year-end.
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