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What’s been happening in the Energy Industry

18 February 2019

A number of energy firms have collapsed in recent years, most of which took place throughout 2018, with the latest casualty being Economy Energy, collapsing in January of 2019.

Many of the failed companies blamed rising wholesale energy prices and tougher regulations being introduced by OFGEM, including the Energy Price Cap. OFGEM have since announced a rise in the Energy Price Cap which has resulted in three of the Big Six increasing their prices.

Often small suppliers cannot afford to buy wholesale energy as far in advance as other larger suppliers like the Big Six, meaning with the energy market continuing to rise, smaller suppliers are being squeezed financially, leading to their eventual collapse. However, whilst this is the case for some suppliers it is not the case for all and many of the smaller suppliers are running very successfully.

Our advice is to always to do your research and think about factors other than price, think about looking at review sites to find out how quickly issues are resolved as well as general customer service levels. Citizens advice also publish a table rating suppliers on customer service. In November of last year, OFGEM also announced they will be introducing new tougher tests to acquire a license to set up an energy firm which they hope will be in place by late spring of this year.

Whilst the collapse of the energy firms has caused some concerns, OFGEM’s Executive Director reassured “Energy suppliers that have entered the market over the last few years have offered consumers more choice and helped to drive down energy prices and drive up customer service standards”.

Source: The Guardian

As well as the declining number of Energy Suppliers, last week also saw the collapse of Energy Broker UtilityWise, one of the largest Energy Brokers in the UK. They announced they were unable to raise enough to cover their debts as well as being unsuccessful in trying to find a buyer. This comes after they announced they were seeking a £10 million investment in January 2019.

 

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