Energy firms call for support following record gas price high

In response, Russian President Vladimir Putin said supplies to Europe would be increased. These appeared to have calmed the markets slightly, with wholesale prices dropping to 257p a therm.

Commenting on this, Susannah Streeter, a senior investment and markets analyst at Hargreaves Lansdown, said: “It’s clear investors are desperate for any gust of good news blowing in.

“Surging gas prices which accelerated the sell off on the FTSE 100 were reined in a little after Russia’s president said the country would increase the amount of gas it will send to Ukraine via Europe, over the level it’s currently contracted to do. It underlines the volatility in the market and the nervousness amongst investors about low stockpiles of gas across Europe.”

It comes in what has been a turbulent time for energy providers in the UK. Over the past few weeks, nine energy firms, who had a combined total of more than 1.5 million customers, have gone bust - with the latest being ENSTROGA, Igloo Energy and Symbio.

And while no household has been left without a provider due to Ofgem’s Supplier of Last Resort process, it’s expected consumers will end up with a collective bill of £826m for rescuing customers of energy suppliers that have collapsed.

The research published by wealth management group Investec also suggested that the cost of rescuing customers whose suppliers have gone to the wall could translate into every household being billed in the region of £30 each.

Off the back of the current crisis, UK trade body the Energy Intensive Users’ Group (EIUG) has called on the government and Ofgem for extra support, and “must match the urgency” shown in other countries by implementing measures to protect the UK’s energy-intensive industries.

The steps it’s calling for include the introduction of winter cost-containment measures on gas, electricity and carbon price in order to ensure that those most exposed to these costs can continue to operate this winter.

In addition to this, the government must outline steps to ensure that sufficient gas is available and that the “priority site” value threshold is reduced from £50m to £1m.

Commenting on the news, EIUG chairman Dr Richard Leese, said: “We have already seen the impact of truly astronomical increases in energy costs on production in the fertiliser and steel sectors.

“Nobody wants to see a repeat in other industries this winter given the UK EIIs [energy-intensive industries] produce so many essential domestic and industrial products and are intrinsically with many supply chains. Now is the moment for government and Ofgem to take preventative action.”

The current state of the energy market will be high on the agenda at this year’s Utilities and Telecoms Conference, sponsored by Just - taking place on 24 November at The Midland in Manchester. To find more information about the event, click here.