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British energy group in urgent talks with government over natural gas crisis

UK Business and Energy Secretary Kwasi Kwaten is one of the UK’s largest energy groups today, as there is growing concern that record high gas and electricity prices could send a supplier’s “tsunami” to the wall. We are stopping the crisis in the sector by making emergency calls to some.

Soaring wholesale prices have closed five small suppliers since early August due to inadequate hedging strategies or weak balance sheets that could not cover the cost of energy committed to supply.

There is growing concern among the CEOs of major suppliers that five companies, including People’s Energy and Utility Point, have 570,000 domestic customers and are just the tip of the iceberg.

“By the time winter comes, we could have less than 10 suppliers,” said Baringa, an energy consultancy. According to the latest market share data available from Ofgem, there were 49 domestic suppliers as of the end of March.

A director of one major energy supplier called this situation “unprecedented” to ensure that there was a “tsunami” of supplier failure and that customers in those businesses were reassigned to another company. He said it could put serious pressure on Ofgem’s process.

Michael Lewis, CEO of Eon UK, told the Financial Times. In an interview last week The situation facing suppliers was “extremely difficult” because the market was already “vulnerable” before the recent rise in wholesale prices.

He pointed out that the industry as a whole is in the red after the introduction of a price cap of 15 million households in 2019, which limits supplier margins.

Ofgem appointed EDF Energy to take on 220,000 customers from Utility Points on Friday, but has not yet nominated an alternative supplier for People’s Energy’s customers.

“The UK has more than enough demand There are a variety of gas sources with capacities. “

“No supply emergencies are expected this winter,” he said.

Kwarteng added that energy security is an “absolute priority” and that the government is working with Ofgem and gas operators to monitor supply and demand.

Record gas prices are affecting the UK economy as a whole, forcing the closure of two large fertilizer plants in northern England this week threatening the supply of meat-to-steel products.

Britain’s shadow business secretary, Edward Miliband, accused the government of “not found anywhere” earlier this week.

“Because of the fundamental failure of long-term government planning over the last decade, we are very exposed and vulnerable as a nation, and it is the businesses and consumers who are paying the price,” Milliband said. I did.

The government said the UK “benefited access to a variety of gas sources to ensure that households, businesses and heavy industries had the energy they needed at the right price.”

“We are closely monitoring this situation and are in regular contact with food and agricultural organizations and industries to control the current situation.”

Quarten’s talks will take the form of individual calls to the CEOs of major suppliers such as British Gas and Scottish Power, people familiar with the talks said.

Gasoline prices in the UK and Europe have repeatedly hit highs in recent weeks as traders fear the continent is heading into winter with record low inventories. After the long cold of last winter, the storage facility remained depleted.

Domestic sources, due to reduced supply from Russia and late maintenance by gas field operators from last year, restricted injections into storage facilities during the summer.

Soaring gasoline prices have had a knock-on effect on electricity prices, especially in countries such as the United Kingdom, where fuel is the largest single source of electricity.

Low wind speeds have spurred soaring electricity prices, and there are concerns about whether there will be sufficient supply in winter due to the shutdown of other power plants and the fire of Britain’s major submarine power cable from France on Wednesday. increase.

Energy switching transactions are depleted

Consumers looking to save money by switching energy providers will find it nearly impossible as hundreds of transactions are withdrawn from the market, pushing up the cost of fixing to fixed rate contracts. Claer Barrett, FT’s consumer editor, wrote:

Several UK price comparison websites, including Compare the Market, have suspended energy switching services due to restrictions on the number of rates available to energy suppliers.

Other companies, including uSwitch and Moneysupermarket, offered a fraction of the normal number of switching transactions. The uSwitch website warns consumers searching for quotes that “may want to wait for more deals,” and rising wholesale energy costs “affecting the number of transactions currently available.” I have. ”

SSE, one of the UK’s largest energy providers, no longer offers new customers the ability to get quotes and switch to their own website, saying “our energy bills are temporarily unavailable.” I am.

Transactions still offered through comparison sites surveyed by FT require consumers to “fix” to one-year, two-year, or three-year fixed-price contracts, most often £ 15 to 100. An exit penalty in the range of pounds will be imposed.



British energy group in urgent talks with government over natural gas crisis

Source link British energy group in urgent talks with government over natural gas crisis

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