Ofgem preparing for next wave of supplier collapses 

It’s understood that at least four suppliers were in talks with Ofgem on Tuesday (12 October) about entering its Supplier of Last Resort (SOLR) system. According to Sky News, industry sources have also said the decision of at least some of those four companies to cease trading could be announced as early as today (13 October).

It comes after business secretary Kwasi Kwarteng ruled out lifting the energy price cap, describing it as a “non-negotiable”. Writing in the Sunday Express over the weekend, he said: “the safety net that we have in place to shield consumers from instant price hikes in Christmas, and ensure everyone gets the supply they need.

“Despite some pushing me to lift the cap, I am absolutely clear it is here to stay and will remain at the same level throughout winter. Keeping this protection in place is non-negotiable for me.”

Over the past few weeks, nine energy providers have ceased trading - with Ofgem even reportedly putting insolvency experts Teneo on standby as a special administrator for the emergency rescue of a major energy supplier if the situation cannot be resolved through the SOLR.

According to Sky News, energy company executives said Teneo had been drafted in to advise the regulator following the collapse of a raft of smaller energy companies over the past few weeks.

In addition to this, UK trade body the Energy Intensive Users’ Group last week became the latest trade body to call for extra support from the government and Ofgem, adding that they “must match the urgency” shown in other countries by implementing measures to protect the UK’s energy-intensive industries.

Modelling published by Cornwall Insight, meanwhile, suggests the energy price cap could increase by approximately 30% in the summer of 2022. If the predictions from the energy market analysis firm come to pass, this would see prices climb to approximately £1,660.

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.