Igloo Energy and two other smaller suppliers have become the latest electricity and gas suppliers in the UK to reach record wholesale prices, with more than 225,000 additional households being transferred to a new supplier.
Matt Clemow and Henry Brown, co-founders of Igloo, announced that the company would stop trading, saying the market was “unfortunately no longer sustainable for Igloo”. Symbio Energy and Enstroga also folded, taking the total of retail suppliers since the beginning of August to 10.
Igloo has 179,000 customers, Symbio 48,000 and Enstroga 6,000, regulator Ofgem said, adding that together they make up less than 1 percent of the market.
The UK retail energy sector went into crisis earlier this month as it became clear that a large number of suppliers were in danger of falling out of pocket quickly as wholesale prices for gas and electricity rose well above the levels they to customers. With the latest departure, at least 1.7 million customers have lost their provider in the past two months.
UK gas prices are trading close to £ 1.80 per term, more than three times higher than at the beginning of the year amid fierce competition for stocks worldwide.
The sector has requested a rescue package from the government, but Business Secretary Kwasi Kwarteng has ruled out rescuing any business and said the broader sector should first try to resolve the situation through existing processes.
Ofgem, the regulator, helps allocate orphan customers through the so-called provider of the last resort, which transfers them to new providers. But there are questions as to whether it will still be feasible as more businesses fold, as most customers are losing to suppliers at current wholesale prices.
There is currently a difference of more than £ 500 between how many suppliers will be allowed to charge below the UK annual price limit, which rises from £ 1,277 from October, and the cost of almost £ 1,800 to raise energy for new customers buy. wholesale prices.
For customers who have cheaper fixed prices, their bills can also rise by hundreds of pounds up to the price limit.
The potential cost to other households of rescuing the customers of failed energy traders comes under the spotlight. ScottishPower CEO Keith Anderson warned last week that ‘billions of pounds’ could potentially be spread across every household account in Britain.
Research published this week by Investec suggests that the cost of rescuing the 1.5 million customers whose suppliers expired before Wednesday could lead to every household paying for electricity and gas together in the vicinity of £ 30 each.
Igloo said that although it supports the price constraint, the system for calculating its level “is based on the largest suppliers and that all calls to review it by the challenger brands, such as Igloo, are still being resisted”.
The company added that its heat pump installation business will continue to trade.
Octopus Energy said this week it would take on 580,000 customers of Avro Energy, the largest supplier still hit by the crisis, in the UK retail energy market, while Royal Dutch Shell’s UK electricity company was appointed to supply the 255,000 customers of Green, a group in Newcastle.