UK Energy Suppliers Face “Massacre” Amid Soaring Gas Prices
Another 20 energy providers in the UK could go bust in what looks like a “massacre” in the coming months unless the government reviews the energy price cap, the chief executive of one of the largest providers said on Thursday.
More than a dozen power suppliers in the UK have exited the retail energy market in recent weeks, and more are likely to do so, as wholesale gas prices rally.
Europe’s tight gas market, low wind speeds, abnormally low gas inventories, and record carbon prices have combined in recent weeks to send benchmark gas prices and power prices in the largest economies to record highs.
The UK has a so-called Energy Price Cap in place, which protects households from too high bills by capping the price that providers can pass on to them, but which additionally burdens energy providers.
Unless the UK government intervenes and reviews for raising the price cap soon, “we are in danger of just sleepwalking into an absolute massacre”, Keith Anderson, chief executive at ScottishPower, told the Financial Times.
“We think probably in the next month at least another 20 suppliers will end up going bankrupt,” Anderson told SkyNews.
The price cap currently costs providers around $6.9 billion (£5 billion), the top executive of ScottishPower, one of the largest utilities in the UK, told SkyNews.
Last month, the head of the UK’s energy regulator said more energy suppliers were set to go bust as soaring gas prices are putting an unprecedented cost burden on smaller electricity and gas providers.
“I think what is different this time is that dramatic change in the costs that those suppliers are facing,” Jonathan Brearley, chief executive officer of Ofgem, the independent energy regulator for Great Britain, said in September.
Back then, Brearley and the UK’s Business and Energy Secretary Kwasi Kwarteng said in a joint statement that the energy price cap would remain in place.
See more here: zerohedge.com
Header image: The Irish Times
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A Reasonable Man
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Do they even offer econ 101 and 102 in University these days? But most people can figure out these polices are disastrous without a college course .but you see the geniuses in government policy think they are going to force a change by making company’s and their country’s citizens really really broke and really really cold. Then those really really smart engineers and scientist will come up with away to change both the laws of physics and supply and demand in economics. You know , if you wish it really hard , reality will change. How long will people suffer these fools.
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Alan
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Kamikaze Johnson will destroy everything.
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