These are the energy companies to have gone bust in 2021, amid rising gas prices
Many energy firms are facing an uncertain future as a sudden rise in wholesale gas prices threatens to reshape the UK sector.
Industry experts predict as many as 60 energy companies could go to the wall in 2021, reducing the number of suppliers to as few as 10.
This is a significant drop from the start of the year, which saw 70 firms supplying energy to UK households, as the hike in gas prices grips tight.
Wholesale gas prices have risen 250% since January 2021 and 70% in August alone, according to data gathered by industry group Oil & Gas UK.
These are the energy companies to have gone bust, those in trouble and what the government has said amid rising wholesale gas prices.
Why are gas prices rising?
In imbalance between supply and demand has seen the price of gas skyrocket.
There is a high global demand for gas, with the UK's needs increasing as the colder weather set in through the winter months, while a shortage of supply.
Planned maintenance, reducing the nuclear power outage of the UK by a fifth, as well as lower solar and wind renewable energy generated has also contributed.
At the moment, companies are shouldering that financial burden due to the government's energy price cap which limits the cost firms can pass on to its customers.
Yet the cap is set to rise by £139 a year, from £1,138 to £1,277 a year, starting from 1 October 2021 and will be reviewed again by Ofgem in six months’ time.
Who are ‘the big six’ energy companies?
A collection of well established energy companies are known as 'the big six'.
They are the biggest energy suppliers in the UK and have been dominant in the sector for some time - but they are not adverse to change with many mergers having taken place.
Traditionally, the big six were British Gas, EDF Energy, E.ON, npower, Scottish Power and SSE.
Though SSE is owned by OVO, npower is owned by E.ON and Scottish Power is owned by Iberdrola and not all the companies supplying gas to the UK are based in the UK.
Smaller companies, particularly those with an emphasis on renewable energy, have enjoyed a market share in recent years, including Bulb and Octopus.
Which energy companies have gone bust?
Pressure continues to mount on many energy firms, brought on by the rise in wholesale gas prices coupled with the energy price cap.
It has proved too much for some companies in recent weeks, with five UK suppliers biting the dust unable to find a way forward amid rising costs.
The companies are:
- Utility Point (14 September)
- People’s Energy (14 September)
- PFP Energy (7 September)
- MoneyPlus Energy (7 September)
- HUB Energy (9 August)
New suppliers have been found for all five firms to have gone bust, with industry regulations ensuring energy supply will continue for affected customers.
Which energy suppliers are in trouble?
A handful of the UK's energy suppliers are at risk of going bust in the next week, according to reports.
Following the collapse of Utility Point, People's Energy, PFP Energy and MoneyPlus Energy in September 2021, more could follow before the end of the month.
Bulb Energy, the UK's sixth largest energy company, is one of those suppliers looking for extra funds to bring order to the balance sheet, as it searches for a bailout.
Government chiefs have been in talks with representatives from the energy industry to understand the widespread impact the rise in gas prices is having on households and businesses.
Business secretary Kwasi Kwarteng said the government won't bail out "failed companies" and stated the energy price cap, "which saves 15 million households up to £100 a year", will remain.
Speaking in the House of Commons on Monday 20 September 2021, Mr Kwarteng said Britain has a “diverse range of gas supply sources”.
He said: “We have sufficient capacity, and more than sufficient capacity, to meet demand and we do not expect supply emergencies to occur this winter.
“There is absolutely no question of the lights going out or people being unable to heat their homes. There will be no three-day working weeks or a throwback to the 1970s.
“Such thinking is alarmist, unhelpful and completely misguided.”