UK power sector could experience a tidal wave of bankruptcies

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Update: Green Energy, a small business, and Avro, a midsize energy retailer, have just declared bankruptcy, leaving 1.5 million homes looking for a new supplier.

More UK energy providers are on the verge of bankruptcy as soaring gas prices place an unprecedented financial burden on small electricity and gas suppliers, the chief regulator said on Wednesday. British energy.

“We expect that more (suppliers) will not be able to cope with the circumstances we find ourselves in, but it’s really hard to say more, in part because it means predicting what may happen to the business. gas prices, “Jonathan Brearley, chief executive officer of Ofgem, the independent energy regulator for Britain, said at a business committee hearing in Parliament, as brought by the BBC.

The UK has been hit hard by the gas crisis in Europe, with wholesale gas prices reaching record highs in recent days.

The tight gas market in Europe, low wind speeds, abnormally low gas stocks and record carbon prices have combined in recent weeks to send benchmark gas prices and electricity prices to the highest levels. big savings at record highs. Almost daily, gas and electricity prices in Europe are hitting new records, putting pressure on governments as consumers protest against soaring electricity bills.

The UK government is looking to ensure an uninterrupted energy supply to customers, as several energy suppliers have already gone out of business due to high costs. Ofgem was nomination other energy suppliers to take over customers of bankrupt energy companies in recent days.

And according to the CEO of Ofgem, more and more suppliers will close their doors.

“It’s not uncommon for suppliers to exit the market,” said Brearley of Ofgem.

“I think what’s different this time around is this dramatic change in the costs that these suppliers are facing,” he added.

“In the event of an energy supplier failure, we are committed to ensuring that consumers experience as little disruption as possible – and clear and well-established processes are in place to ensure this is the case,” Brearley said. and the British Secretary for Business and Energy, Kwasi. Kwarteng noted in a joint statement earlier this week.

By Tsvetana Paraskova for OilUSD

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