Two more energy suppliers, Neon Reef and Social Energy Supply, collapsed yesterday taking the total number of failed providers since September to 24.
It means 2million domestic customers have lost their supplier in just three months.
As a result, they, and millions more, face far higher prices with bills likely to increase by hundreds of pounds.
It comes as inflation reached its highest level in nearly a decade with the CPI rate spiking to 4.2 per cent in October as a result of supply chain chaos, labour shortages and surges in energy costs.
There have been several energy firms collapsing with customers moved to new suppliers
It’s bad news for consumers as energy costs show no sign of slowing down with UK gas prices jumping 17 per cent today, with households being warned to brace for soaring bills.
There has been extra concern after a German energy regulator suspended approval for a pipeline that would carry Russian gas directly across the Baltic to Germany and wider Europe.
Wholesale prices subsequently shot up across Europe amid worries Russia will not increase deliveries of gas via alternative routes if the Nord Stream 2 pipeline is blocked.
Since the start of the year, prices have increased by hundreds of pounds for customers with costs likely to rise still.
Experts say customers could see their bills increase by hundreds of pounds in some cases with some warning the price cap is likely to reach over £300 when reviewed in April next year.
The staggering increase in energy costs has been sparked by a number of factors but ultimately is due to the lack of natural gas being produced as well as an increase in demand.
As a result, as wholesale costs rise, energy firms need to pay for them and much of this cost will be passed on to consumers.
Due to the ongoing trouble, it is likely that several more suppliers will go bust before the end of the year as the number of providers has now more than halved since the start of 2021, affecting millions of customers.
Some eight suppliers have ceased trading in November alone including CNG Energy, Omni Energy and Bluegreen Energy, as a result of the ongoing energy crisis.
Whilst the majority of collapsed suppliers have been smaller firms, such as Bluegreen Energy which supplied 5,900 domestic customers, others such as Avro Energy, were providing energy to 580,000 homes.
Collapse: Some 24 energy suppliers have ceased trading since the beginning of this year
Now millions of customers have been moved to a new supplier and automatically placed on their standard variable tariff – previously, many were on a cheap fixed-rate deal, that their new supplier doesn’t have to honour.
Usually, consumers would be advised to move to a fixed deal in order to get the best deal but that advice has changed recently with households persuaded to stay on a default tariff.
This is because these are protected by Ofgem’s price cap which now sits at £1,277 – the highest limit it has ever been since launching in 2019 but much cheaper than the fixed tariffs being offered to customers.
Some consumers are even being quoted over £2,000 for their annual energy bill.
For those who are with a supplier that has collapsed, they are advised by Ofgem to stay put and not switch away. The regulator will find consumers a new provider through the supplier of last resort system.
Natural gas prices have soared this year, leaving customers paying hundreds of pounds more
Under this system, outstanding credit balances owed to existing and former customers will be paid and householders transferred will be protected by the energy price cap.
The suppliers are determined through a bidding process, where Ofgem selects the most appropriate provider to take in the customers of a collapsed firm.
An Ofgem spokesperson said: ‘We know that the current situation with high wholesale energy prices is putting pressure on customers and energy companies. This is a global issue.
‘We have the systems and processes in place to ensure that customer needs are always met.
‘For those customers who are with energy companies that can no longer trade, a new supplier will be appointed. Ofgem is working closely with government to manage the wider implications of the global gas price increase.’
As yet, it is not known when the situation will be resolved as prices continue to rise.
It may be some months before the crisis has settled but by that point, it is likely there will be far less suppliers in the market.
In fact, some have predicted there will be as little as 10 trading by the end of the year.
Experts have argued there is more the Government & Ofgem can do to help customers
Now experts are calling on the Government and Ofgem to do more to help.
Peter Smith, director of policy and advocacy at fuel poverty charity, NEA, said: ‘The cost of living in the UK is soaring to its highest level in a decade.
‘Household energy bills were the biggest driver – which have increased by well over £200 since last winter.
‘If energy bills go up again in April by between £400 and £600, as predicted by some energy experts, the cost of heating a home will have more than doubled in a year.
‘Without any additional support, millions are sinking further into debt and many are turning off the heating. This leaves them at acute risk of serious ill-health as we head into colder weather.
‘Soaring gas prices gift Treasury a huge tax windfall. The UK Government should be using these resources to directly help the poorest households reduce their bills.
‘There is also far more the energy regulator, Ofgem, can do help the poorest consumers.’
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