Bulb to receive nearly £1.7bn bailout

In a High Court ruling last week, Bulb was put into special administration which will allow it to continue to trade for the time being. Additionally, the government will set aside a £1.69bn loan to support the company. 

It comes after regulator Ofgem’s chief executive Jonathan Brearley sent an Energy Supply Company Administration (ESCA) order to business secretary Kwasi Kwarteng. In response, Kwarteng consented to the application. 

The UK’s seventh-largest energy supplier, Bulb, entered into ESCA on 24 November 2021, with Matt Cowlishaw, Matt Smith and Daniel Butters of Teneo Restructuring appointed as special administrators. 

A lot of suppliers have been heavily hit by the current gas price crisis, which has seen gas in the UK being traded as high as 400p a therm. This resulted in the energy price cap going up by £139 at the start of October for people on a default tariff, while prepayment customers saw an increase of £153.

Bulb’s collapse has been expected by industry rivals for some time, with some sources describing the company to The Guardian as the “walking dead” after it struggled to find new investment.

And reports in the Financial Times suggest that several energy suppliers had previously approached Ofgem to submit plans that would have allowed Bulb’s customers to be moved into alternative providers at less cost to consumers and taxpayers. 

In the same week Bulb entered into the ESCA, it was announced that two more suppliers, Entice Energy and Orbit Energy, had ceased trading. The more than 70,000 customers of the two providers will be moved to a new supplier, which will be chosen by Ofgem. 

It brings the total number of providers to have left the market since the start of 2021 up to 26.