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Fear of “domino effect” threatening energy suppliers as gas wholesalers go out of business

There is growing concern that the “domino effect” could lead more energy suppliers to go out of business after major gas wholesalers withdraw from the market.

Government ministers continued to be pressured to take action to resolve on Thursday Gas price crisis Two more times later Energy supplier It became a bust. Eighteen more companies are believed to be at risk after wholesaler CNG states that it will not supply retailers with gas.

The founder of the green energy company Ecotricity said the withdrawal of CNG could cause a wider range of problems. Dale Vince tweeted. “And one gas carrier that provides wholesale gas to 18 utilities can cause the domino effect.”

The warning came when energy regulator Ofgem sought a new supplier for its 250,000 customers of Pure Planet and Colorado Energy, which closed on Wednesday. Currently, approximately 2 million customers are invested in Ofgem’s Last Resort Process supplier.

Regulators emphasized that the customer’s energy supply will not be interrupted and the credit balance will be transferred to the new supplier.

Pure Planet, backed by oil giant BP, has criticized the government and Ofgem for hoping to “sell energy at a price much lower than current purchase costs.”

The energy price cap, which sets the maximum amount that suppliers can charge at standard rates, rose 12% in October, but wholesale gas prices have risen several times.

“This is unsustainable, so sadly we had to make the difficult decision to stop trading,” said Pure Planet.

The company said it had been hedged against rising energy prices until next spring and faced significant potential losses, urging BP to withdraw funding.

On Thursday, wholesale gas prices began to rise again after falling from record highs earlier this month, showing no immediate sign of pressure on suppliers.

Recent supplier failures have occurred as Sir Jim Ratcliffe, the boss of chemical giant Ineos, warned that high energy prices would continue throughout the winter and the industry could begin to close.

Sir Jim said the lack of gas storage in Britain left the country vulnerable to fluctuating prices.

Appeared on ITV PestonAsked if he could shut down the country because of a protracted cold spell, he replied: “Yes, then all you do is shut down the industry.” ..

“I think it’s very difficult to predict how long this kind of current situation will last, but if you’re a bettor, obviously our gas demand is on the rise, so at least winter. You’ll probably pass through during the winter. “

He added that gas is “a very strategic and important requirement for the UK economy and that the situation in gas is not well organized and that the UK economy needs to be free from ransom.”

Andy Harris, a consultant for energy company Neon Leaf, said the energy market is in the midst of a “worst case.”

“It’s a market set to fail, and I think my confidence in (regulatory) Ofgem is a bit diminished,” he told the BBC’s Today program.

“We have price caps, and it’s right to put consumers in a position to simply have invoices that they can’t afford to pay without being exposed to extreme circumstances.

“Unfortunately, the solution implemented by the government and Ofgem is like putting all the risks on the shoulders of the supplier.

“Of course, in the worst of situations as it is today, only the broadest shoulder supplier can absorb these losses.”

Fear of “domino effect” threatening energy suppliers as gas wholesalers go out of business

Source link Fear of “domino effect” threatening energy suppliers as gas wholesalers go out of business

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