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The CEO of energy regulator Ofgem told MPs that more energy companies are likely to stop trading due to higher energy prices.
Jonathan Brierley told the Committee on Trade, Energy and Industrial Strategy that Ofgem is planning for any eventuality, and that there is significant pressure on the sector at the moment due to the rise in energy prices.
Q: What gives the Prime Minister confidence to say that this will be a temporary issue?
Brierley says history shows that price hikes disappear. But that’s not something Ofgem depends on – it has to plan for a whole host of scenarios.
Committee on Business, Energy, and Industry Strategy (CommonsBEIS)
This morning from 10:30 we speak to ELPinchbeck, Ofgem and NEA_UKCharity and from 11:30, Foreign Minister KwasiKwarteng on issues affecting the UK gas market.
📺 Watch the live broadcast https://t.co/ITOMXgkBkphttps://t.co/nVVfv9Jblg
September 22, 2021
Q: How important is the current gas crisis compared to the shocks of recent years?
It’s a “different kind of change,” Brierley says. The sector has faced shocks before, including the Covid crisis.
But the change in the price of gas is something we have not seen before at this pace.
Kate Ferguson (@kateferguson4)
Jonathan Brierley, CEO of Ofgem, warns that energy prices are rising in an “unprecedented” way. “If you look at gas prices – it’s something we don’t think we’ve seen before at this pace”, he warns, more companies are going to collapse
September 22, 2021
Unfortunately, when you see costs change like this, that will eventually pass on to customers.
Many suppliers are under great pressure, due to the significant change in their cost base.
Q: How many suppliers are at risk?
Brierley says the industry has seen companies exit before. But something different this time is the big change in costs.
Five energy suppliers have ceased trading in recent months, and others collapsed earlier in the year — and Ofgem predicts that more will not be able to cope with our conditions, Brierley says.
But he will not expect how it will end.
Q: How many clients and how many clients?
Brearley says Ofgem is planning a range of scenarios:
We expect a large number of customers to be affected. We have already seen hundreds of thousands of affected customers. It may go much above that.
Q: So millions of customers can be affected?
Certainly a large number of customers, Brierley repeats – but he won’t anticipate any running operations.
Q: Will it just be small suppliers, or can big suppliers be hit as well?
Brearley refuses to make predictions – noting that the industry has seen a sixfold change in the price of gas.
As a prudent regulator, he adds, we plan for all scenarios.
Kate Ferguson (@kateferguson4)
Jonathan Brierley, chief executive of Ofgem, points out that millions of Britons will be hit as a string of energy suppliers could collapse in the coming weeks. “We expect a large number of customers to be affected.”
September 22, 2021 Paul Kelso (@pkelso)
At CommonsBEISofgem, CEO Jonathan Brierley declined to say how many people could be signed with troubled energy providers, well beyond “much more” than the hundreds of thousands. Private industry estimates it could be six million households https://t.co/xTBuidolU3
September 22, 2021
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