Energy crisis: Shock graph shows rocketing prices forecast as UK struggles with supplies

More energy suppliers set to fail warns expert

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BBC Newsnight’s editor Ben Chu has revealed that more than 1.5 million households are being forced to switch energy suppliers, saying that “we’re all going to have to pay more for our energy in the coming months”. It came after two more energy firms, Avro and Green, became the fourth and fifth companies to go bust in recent weeks due to the sharp rise in gas prices. Over 1.5 million properties are now facing a switch to a new, potentially more expensive firm.

Speaking to presenter Emily Maitlis, Mr Chu said: “The energy crisis is definitely heating up rather than cooling down. 

“Avro Energy and Green are the two suppliers which went to the wall today.

“Avro is the biggest supplier to fail so far. 600,000 customers, together they had about 835,000.

“Put it all together, and you got about one and a half million customers in total who’ve seen their suppliers failed in this crisis in September alone.”

He continued: “And they will all be transferred to new provider firms by Ofgem, the energy regulator, but there will certainly be many more to come.

“Analysts are expecting dozens, possibly dozens more of these small suppliers to fail, between now and Christmas.

“Where does that leave customers? Well, it doesn’t mean that their energy is going to be cut off or interrupted it probably does mean that their bills are going to rise, though, although maybe not going through the roof immediately.

“So if a customer was on a fixed-term contract that might just possibly be honored by the new supplier.”

 

Mr Chu went on: “But, otherwise they’ll go into the standard variable tariff, which will probably be higher.

“But the extent to which it is higher will be limited by the government’s price cap, of course.

“But the bottom line Emily is that we’re all going to have to pay more for our energy in the coming months.

“And that’s an indicator of that, let’s have a look at ofttimes annual energy price cap, which is linked to the market price, albeit with a lag.

“And as you can see that it’s going to go up to 1277 pounds a year in October, a big 12% Rise-140 pounds.

He added: “And when this is next revised again in the spring is expected to go up by hundreds of pounds more.

“And talking of bills, the government will probably have to pay the new largest suppliers for taking on these new customers.”

The energy price cap, set by industry regulator Ofgem, helps to control the cost of gas and electricity in the UK.

The cap limits the unit rate and standing charge that suppliers can bill for their default tariffs. 

In 2021, the cap level has risen twice in the same year for the first time and is now at its highest point ever.

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