Page 7 - EurOil Week 38 2021

EurOil COMMENTARY EurOil

UK faces energy crisis

amid gas price spike

Energy suppliers are seeking state support, but the government has ruled out

outright bailouts

UK THE UK government is taking steps to avert suppliers fail, the government will ensure that
what could be an energy crisis this winter, fol- consumers face the least amount of disruption.
WHAT: lowing a surge in gas prices in recent months that In addition to Ofgem, the meeting included rep-
High gas prices have has led to several energy suppliers going out of resentatives from Scottish Power, Octopus, Shell
led to a series of business. Energy, E.ON, Centrica, Ovo, National Grid,
bankruptcies in the UK Business and Energy Secretary Kwasi Energy UK, EDF, Bulb and the Citizens Advice
energy sector. Kwarteng has spent the last few days in discus- Bureau. Over the coming days Kwarteng said he
sions with energy executives and the head of would also meet with smaller energy suppliers.
WHY: Ofgem, Jonathan Brearly, on how to mitigate the Six energy suppliers had gone bankrupt at the
Gas prices are at a record situation. Constrained LNG supply to Europe, time of press. The latest casualties are Avro and
high across Europe, amid as well as a sharper-than-anticipated recovery in Green Supplier, which have announced they will
supply constraints and a demand, has led to record prices on wholesale cease trading on September 22. Between them,
rebound in demand. markets at a time of year when prices are typi- the pair control 2.9% of the market’s domestic
cally subdued. customers.
WHAT NEXT: “We want to be clear that this is not an issue of The supplier obligations of companies that
The government is supply – the UK benefits from having a diverse went under earlier were taken over by larger
looking at ways to range of gas supply sources with capacity that groups such as EDF, Centrica and others, who
support the energy sector, can more than meet demand,” Kwarteng said in were selected as suppliers as last resort. Kwarteng
but it is eager to avoid a statement. “This morning we hosted a round- said on September 19 that if suppliers of last
rewarding failure. table with leading energy suppliers and con- resort could not be found for the customers of
sumer groups to hear about the challenges they failed companies, then a special administrator
currently face. There was overarching consensus would be appointed by Ofgem and the govern-
among meeting participants that the top priority ment to do the job.
must be ongoing support for energy customers, “The objective is to continue supply to cus-
especially the elderly and vulnerable.” tomers until the company can be rescued or cus-
The minister said that should energy tomers moved to new suppliers,” he said.

Week 38 23•September•2021 www. NEWSBASE .com P7