Energy market collapses could cost households £120 each

This could cost the average household £120, which could potentially push some into fuel poverty. Since the start of the energy crisis in August, driven by rising gas prices, 22 companies have entered into a supply of last resort (SOLR) process - at a total cost of £1.2bn. 

In addition to this, Bulb - the UK’s seventh largest energy supplier - was put into special administration, which will allow it to continue to trade for the time being. In order to support this process, the government has set aside a £1.69bn loan for the business. 

According to Investec, the cost of the SOLR will cost at least £600 per customer. Add this to the £1.69bn figure set aside for Bulb, alongside the renewable obligation mutualisation costs, the researchers suggest the cost to the domestic customer would be equivalent to £120 per household - which could, it says, potentially push some into fuel poverty. 

Due to the now considerably smaller pool of suppliers, Investec argues this should lead to an ultimately stronger supply market. This, it hopes, will be supported by a regulatory backdrop that “drops an obsession with switching for switching’s sake”, and is supportive of the role that suppliers need to play in facilitating the journey to net zero.