“We do not believe any group of men adequate enough are wise enough to operate without scrutiny or without criticism. We know that the only way to avoid error is to detect it, that the only way to detect it is to be free to inquire. We know that in secrecy error undetected will flourish and subvert”. – J Robert Oppenheimer.
Jordan Peters – On Why Companies Collapse.
Half of Britain’s energy suppliers face an existential risk after the “Beast from the East” tore through the balance sheets of the industry’s small players.
Thousands of energy customers could be left in limbo due to a high risk that around 10 of the most fragile suppliers are on the brink of going under.
Many hundreds of thousands more bill payers face the risk of sudden energy tariff hikes because almost 40 suppliers may be forced to squeeze their customers to survive.
The startling strain endured by the industry in the wake of the volatile winter energy market is laid bare in leaked proprietary data compiled by one of the City’s top analytics firms, Dun and Bradstreet.
The report, seen by The Sunday Telegraph, ranks 37 of Britain’s 81 energy suppliers as being at risk. Eight are identified as being on the brink of failing based on forensic analysis of company financial accounts and trade payments.
The dire health warning underlines the struggle of energy suppliers, which have endured a winter of price spikes not seen in six years, and face the threat of the Government’s looming energy price cap later in the year.
The list includes many of the suppliers that rely on offering some of the market’s cheapest deals to see off the steady rise in competition. One of the worst hit suppliers, Iresa Energy, has already quietly accepted a major bailout from a larger peer within the last month. The supplier grasped another stay of execution after slumping into credit default twice last week…..
Energy supply bosses fear the regulator may force their companies to pick up swathes of disgruntled energy customers if a smaller market rival goes bust. Their fragile profit margins have been tested by the sudden freeze that swept Britain in late March, and decimated cash flows for poorly funded new market entrants after energy markets spiked to six-year highs.
A perfect storm of weaker European gas production, shrinking storage capacity and rising oil prices has held energy market prices well above those paid last year.
This was an accident waiting to happen. Indeed. my small supplier went under last year for similar reasons.
Many small suppliers have set up in recent years, offering what appears to be attractive prices, but in reality surviving on thin margins. When energy prices spike, as they did this winter, they are rapidly into big problems.
Government has delighted in using these lower prices as a stick with which to beat the Big Six energy giants, who of course have to stand the full cost of the government’s own eco-nonsense, such as smart meters.
This has enabled them to deflect attention away from their own ruinously expensive climate policies.