Pay up or have licences ripped up, Ofgem warns five suppliers
Experts worry that only a handful of energy suppliers might be left in the British market by Christmas after gas prices soared
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Your support makes all the difference.Energy regulator Ofgem has told five suppliers to pay what they owe into a renewable energy fund or risk being stripped of their licences.
The regulator said that the Feed In Tariff (FIT) had not been paid by Colorado Energy, Igloo Energy Supply Limited, Neon Reef Limited, Whoop Energy Limited and Symbio Energy.
Between them they owe £765,000.
The deadline to pay into the scheme, which supports small-scale renewable energy generators, was last Friday.
Not paying into the fund is a breach of suppliers’ licence requirements, and if the suppliers fail to pay up, Ofgem said it might strip them of their rights to supply gas and electricity to homes.
They could also face a fine, Ofgem said.
It comes amid a major spike in gas prices that has put pressure on the entire energy supply sector.
Many suppliers have contracts which force them to sell to customers at a set price for a year – a price that is now well below what gas costs the companies to buy.
The larger suppliers have insured themselves against big price movements by buying their gas ahead of time, however many smaller suppliers have not.
Some commentators have speculated that less than a dozen of the 50 or so suppliers on the market will still be in business by the end of this year.
Five other suppliers have already folded in recent weeks.
In past years, many suppliers have gone out of business in the autumn, as FIT and other payments come due.
Not being able to pay into the FIT or the Renewables Obligation scheme have been seen in the past as indicators that companies’ finances are under pressure.
Earlier on Tuesday, Bloomberg reported that Igloo – which has the biggest unpaid FIT payment – and three other energy suppliers had stopped taking new customers.
Business Secretary Kwasi Kwarteng and Ofgem boss Jonathan Brearley met with suppliers on Tuesday to discuss their situation.
However Mr Kwarteng has previously said there will be no bailouts in the sector.
Colorado Energy has £261,406 left to pay, Igloo owes £316,582, Neon Reef owes £37,351, Symbio Energy owes £146,239 and Whoop owes £3,780.