The energy crisis took the UK by storm and many are worried about soaring household bills this winter. More than half of domestic energy suppliers in the UK had gone bust (47 to 25 today) since the beginning of the year.

Here is a summary of what has happened.

1. Why is the energy crisis happening?

2. List of companies that have gone bust since COVID-19 (updated)

3. What happens when my supplier goes bust?

4. What happens after my supplier has been handed over?

5. Confused? We are here to help

Why is the energy crisis happening? 

The energy crisis we are facing today is the product of many contributing factors, including:

Shortage of gas in the UK due to:

1. Gas platforms in the North Sea are down for maintenance: The UK relies heavily on gas imports especially from Norway, The Netherlands, and Belgium

2. After last winter with higher energy demand due to lockdown, Europe’s gas storage is low: The UK now holds less than 1% of Europe’s stored gas

3. Russia is sending less gas to Europe

We have had less natural wind supply thus less energy generated

French to UK electricity cables were damaged in a fire incident

With less energy available in the wholesale market, electricity prices had gone up 250% since January 2021 with a 70% increase in costs to energy suppliers since August. Rocketed prices forced energy suppliers to supply gas at a loss, so far 7 companies have gone bust, of which 5 have been appointed new suppliers by Ofgem.

List of energy firms that have gone bust in 2021

Updated: 28 January 2022

Source: Ofgem

Some energy suppliers eg. Bulb is asking for a bailout from the government which is yet to be granted. It is estimated that gas capacity will not be full until Spring 2022. Natural gas, a cleaner alternative to burning coal and oil, is mainly used for generating electricity, stove cooking, and heating. Wholesale energy makes up to 40% of household energy bills, meaning consumer prices are likely to increase sharply this winter; though this price increase cannot exceed the Energy Price Cap set by the energy regulator Ofgem. The Energy Price Cap is a government scheme set to regulate prices in the market. The cap sets the maximum amount suppliers are allowed to charge customers for each unit of gas and electricity used on default energy tariffs, including both standard credit or prepayment meters. The Energy Price Cap fluctuates over time depending on the market situation:

What happens when my supplier goes bust?

Q: What happens to my account?

Your account will be passed onto an appointed energy “supplier of last resort” and your bill will likely go up. This transition will take about 21 days, and your credits/ debts will remain unchanged.

Q: What happens to my energy supply?

Your energy supply will not be disrupted. We recommend that you take a meter reading, and take note of your account balance for your records.

Q: Will my bills go up with a new supplier?

If your supplier has gone bust, you are protected by the Energy price cap. If you think you will have difficulty covering your energy bills, there are supporting schemes available for vulnerable and low-income households such as the Warm Home Discount, Winter Fuel Payments and Cold Weather Payments.

Q: Should I switch now?

We recommend that you wait until the new supplier contacts you, so they can advise you on your credit balances. When your new supplier contacts you, make sure to ask to be on the cheapest tariff until you find a better supplier elsewhere.

What happens after my supplier has been handed over?

Q: What happens to my credits?

The newly appointed supplier will be announced online or you will be notified directly by your new supplier. You can ask to be put on their cheapest tariff, and let our connection experts at Please Connect Me look up the best deals for you. When you switch suppliers, you won’t be charged exit fees. Your credits should be protected by Ofgem, but it may be complicated to transfer them to your new (non-appointed) supplier.

Q: Should I switch as soon as possible?

Your old tariff will come to an end, and your new supplier will put you on a special “deemed” contract by default, which is usually of a higher rate- so make sure to do your research/ let Please Connect Me hunt down for the best deals available in the market. If you are in a fixed-term contract, note that your prices might go higher so it may be worth switching to a variable tariff as prices will be regulated by the energy cap. Our connection experts are ready to help you look for the best deals for your household.

Q: Will my new supplier support smart meters?

Ofgem will try to appoint a supplier that supports smart meters, but in the case that they don’t - your smart meter will continue to work, but in “traditional” mode. Meter readings will be taken manually until your new supplier supports smart meters.

Q: Will my winter bills go ridiculously high?

The energy price cap set to renew in October (£1277) will stay in effect until the end of March 2022, so you don’t need to worry about another sudden increase. Whether energy prices go up or down will depend heavily on the wholesale energy situation in Springtime. The next review of the energy price cap will happen in February 2022 and take effect on 1 April.

4. Confused? We're here to help

If you are moving house soon or have recently moved, it is important that you choose the right energy supplier for your household. For more information on the energy crisis, and advice on switching energy suppliers, contact us at +44(0)8003688551 or email us at support@pleaseconnectme.co.uk. Our connection experts are more than happy to help.