Six more energy supplier failures have been annouced this week. Monday saw the closure of Bluegreen Energy (which supplied around 5,900 domestic and a small number of non-domestic customers). On Tuesday four suppliers ceased trading: Zebra Power (around 14,800 domestic customers), Omni Energy (around 6,000 domestic pre-payment customers), Ampoweruk (around 600 domestic and 2000 non-domestic customers) and minnow MA Energy (around 300 non-domestic customers). This evening, CNG has also announced its closure (see below).

This brings the total of failures now to 23 this year, of which 21 served domestic consumers. This represents almost half of the market – according to Ofgem there were 52 active suppliers in the domestic market in December 2020 falling to 49 in March this year, and the same in June. The Ofgem data are slightly confusing because it also publishes data on the suppliers entering and exiting the market which includes a running total and these data appear to lag the total domestic supplier figures by one quarter. It seems unlikely that any suppliers have entered the market since June given current market conditions, which means there are probably just 29 active suppliers serving the domestic market, a level not seen since 2015.

Active suppliers

If we are to believe the Government’s narrative that only poorly run supply businesses are failing, then surely we must ask how is it that Ofgem is presiding over a market where almost half of the market participants are “poorly run”. Surely this is the very definition of a regulatory failure?

Renewables Obligation defaults signal further supplier distress

Last week Ofgem announced various actions in respect of Renewables Obligation (“RO”) defaults in respect of the compliance year 2020/21 which ended on 31 March. The late payment deadline passed on 31 October with a number of suppliers failing to meet their obligations, often a pre-cursor to a market exit.

Earlier in October, Ofgem had identified five suppliers who were likely to default. Of these three have since ceased trading, one has paid in full, while another, Whoop Energy has been issued with a final order in respect of its arears of £56, 306.25 plus interest. A further five suppliers have also been identified as being in default, one of which was in the group that ceased trading yesterday. The other four, Delta Gas and Power, Entice Energy, Neon Reef and Together Energy have been issued with provisional orders. These four plus Whoop Energy are clearly under pressure and may well be the next to close.

Unfortunately for those suppliers that have met their obligations, they will now face a large mutualisation bill in respect of the failed suppliers. I previously estimated the amount to be in the region of £187 million – the largest ever shortfall, double the previous record, which will now be covered by all other suppliers in proportion to their market share. The sheer size of this bill is unlikely to have been factored into their budgets for this year, and it will almost certainly create additional stress, particularly for smaller suppliers.

The fallout from the CNG failure has yet to filter through

Three weeks ago saw the announcement that gas shipper CNG was to exit the market. In addition to supplying 40,000 small and medium-sized businesses directly, CNG provided gas shipper services to 18 other energy suppliers, some of whom also procured their gas through CNG. CNG announced that its insolvency advisors had advised that the gas they had procured on behalf of these suppliers, and any associated hedges, are considered assets of the business and cannot be assigned to the suppliers. This means that those suppliers must not only find a new shipper, but they must also replace those hedges at current, higher, market prices, and provide the collateral to cover this trading activity – it is unclear whether CNG is in a position to return the collateral it holds on behalf of these suppliers.

According to Bloomberg, CNG will cease trading on 30 November at which point suppliers will have up to a further 25 days to find a new shipper, although they would first need to post collateral and buy forward for December before the end of this month. CNG has failed to find a buyer for its supply business and as I was writing this post, it announced it has asked Ofgem to appoint a Supplier of Last Resort.


For those suppliers that have managed to make their RO payments and are not affected by the CNG issue, the wider challenges in the market remain. The Credit Assessment Price which determines the level of collateral suppliers must provide to Elexon is set to jump from £184 /MWh to £259 /MWh from tomorrow, and with wholesale gas and electricity prices continuing to be above the level allowed in the price cap, it is almost certain that more suppliers will fail in the coming weeks.

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