Small UK energy supplier Green Energy ceases to trade after price cap warning

UK supplier Green Energy has ceased to trade, the company said on its website Sept. 22.

It is the fifth supplier to fail in recent weeks due to the rising costs of wholesale power and gas, turning already-slim retail margins negative.

Energy regulator Ofgem would be appointing a new supplier for its 250,000 power and gas customers, the company said.

"Customers need not worry, their supplies are secure and domestic credit balances are protected," it said.

Small energy suppliers were unlikely to survive the coming winter without government intervention because of rising wholesale costs, the CEO of Green Energy, Peter McGirr, said Sept. 20.

Green Energy was effectively hedged in the wholesale market with regard to the 60% of its customers on fixed tariffs, but was "curtailed by the regulator Ofgem" from increasing its variable tariffs for the remainder of its customer base due to the UK's regulated price cap, McGirr said.

"We just don't have deep enough pockets to ride out this storm," he said.

Some 15 million customers are on price-capped tariffs, which were increased by 12% for the coming winter.

Four small suppliers ceased trading in recent weeks, including People's Energy (350,000 customers), Utility Point (220,000), PfP Energy ( 85,000) and MoneyPlus Energy (9,000).

S&P Global Platts assessed the UK NBP front season (Winter 21-22) gas contract at 186.75 pence/therm Sept. 21, double its July 23 assessment.