The number of domestic energy suppliers has fallen by over half from 47 to 25 since the start of 2021.
This is according to Cornwall Insight, which showed that at the start of the year there were 5 large, 12 medium and 30 small suppliers, however this has now dropped dramatically, with the year holding the record for the most supplier exits.
The majority of customers from failed suppliers have been moved to large suppliers – such as E.ON Next, British Gas and EDF – with this growing the market share of the large supplier group from 68.5% at the start of the year to 70.1% today.
“Suppliers are likely to face tough times ahead,” said Anna Moss, head of consumer markets at Cornwall Insight.
Indeed, the Credit Assessment Price (CAP) increased further to £259/MWh on 4 November, a record high figure and the tenth increase in 2021. Alongside this, there are high future prices for the remainder of the winter, with these consistently over £230/MWh for monthly baseload power and 240p/therm for monthly NBP gas on 1 October.
This makes trading arrangements with wholesale trading parties “critical”, reducing exposure to uncapped imbalance prices. Last winter saw imbalance prices reach £4,000/MWh on several occasions, with the day ahead wholesale price also exceeding £1,000/MWh.
“Terms which the suppliers will find acceptable may not be forthcoming as wholesale counterparties will be concerned about the long-term viability of businesses whose input cost is higher than their incoming revenue,” Moss said.
“Those without longer-term deals in place may be forced to pay up-front, offer additional collateral (either in cash or equity), or buy on spot markets, increasing pressure on cash flow management.”
Earlier this week, four energy suppliers – Omni Energy, MA Energy, Zebra Power and Ampoweruk – ceased to trade. Energy suppliers to have shuttered this year include Goto Energy, Pure Planet, Colorado Energy, Daligas, ENSTROGA, Igloo Energy, Symbio Energy, Avro Energy, Green Supplier Limited, People’s Energy, Utility Point, PfP Energy and MoneyPlus Energy.