Pure Planet and Colorado Energy exit the market and CNG announces it will stop supplying gas to its utility clients

The energy supplier crisis continues apace after Pure Planet and Colorado Energy announced that they have exited the market as a result of record-high gas prices. This brings the total number of suppliers lost this year to fourteen.

More Energy suppliers expected to exit the market

Pure Planet criticises Ofgem

Pure Planet issued a statement following its announcement that it was exiting the market criticising both Ofgem and the government’s stance on the current crisis with the price cap being labelled as ‘unsustainable’.

The BP backed energy supplier said, “The government and Ofgem expect suppliers to sell energy at a price much less than it currently costs to buy. This is unsustainable, and therefore, sadly we have had to make the difficult decision to cease trading. In our case, despite being hedged until next spring, and having the backing of BP, Pure Planet faced increasing risks and large potential losses by continuing to operate in this market. Sadly, this led to BP taking a decision to withdraw its support and we are no longer able to continue.”

Also read: Ofgem vows to crack down on energy suppliers following increasing scrutiny of its own performance

What happens next?

In the event of an energy supplier exiting the market, Ofgem will take over the process and assign a gas or electricity supply licensee to take over responsibility for the business’ customers. This occurs once Ofgem revokes the supplier’s licence.

The customers of each failed supplier will now be put into the Supplier of Last Resort (SoLR) process.

 When it comes to choosing a SoLR the authority will assess to see which bidding licensee can support the additional customers without jeopardising the supply to its current customers. It must also be able to fulfil its other supplier obligations. If no suitable supplier wants to be a SoLR, Ofgem can use its powers to appoint a supplier without its consent.

CNG to stop supplying gas to business customers

In another sign of escalation to the crisis, energy supplier CNG Group announced that it will halt supplies to its domestic energy suppliers through their wholesale business.

The company, which is backed by Anglo-Swiss commodity trading giant Glencore, is a gas supplier for SMEs and also provides shipping services.

CNG supplies roughly 46,000 small businesses, including 10-15 small domestic energy suppliers, through their wholesale business.

Following the failures of some of its biggest supplier customers such as Avro Energy and Utility Point, it had to supply gas to households without being paid.

CNG Chief Executive Paul Stanley reportedly said that “the company has been forced into an impossible position” after many of its utility customers went under amid the energy crisis.

Market experts have warned that CNG leaving the market will put further pressure on small UK energy firms and could speed up their collapse.

Further Reading

Bulb, Octopus and OVO join calls for a suspension of green taxes to reduce energy bills, four more suppliers expected to go bust

Omni Energy in hot water for transferring customers to rivals without their permission

A 34% hike in the energy price cap is needed to save struggling energy suppliers

Dyball Associates are proud to help new supply businesses successfully launch in the UK market.

Through our energy market consultancy services, and the software we’ve developed, we’re supporting new UK electricity and gas suppliers to get set up and start supplying.

For more information on how to start and manage an energy company, get in touch with Dyball Associates today.