The UK government have put aside £1.7 billion to support failed supplier Bulb, following it going into the special administration regime earlier this week.
“Our overriding priority is to protect consumers and taxpayers,” A government spokesperson said. “The appointment of administrators will ensure the supply of energy remains normal to Bulb customers while a longer-term solution is agreed.”
The £1.7 billion will be available to Bulb’s administrators – with Teneo appointed until a buyer can be found for the company – as a working capital facility. The administrator is obliged to operate at the lowest cost possible, so it is not clear at this stage how much of the loan will ultimately be used, the Department of Business, Energy and Industrial Strategy (BEIS) noted.
Bulb announced on Monday that it was to enter into special administration, following months of speculation. In September, the company announced that it was looking for new funding opportunities due to the high gas prices and the strain they were having on the UK energy sector.
Ofgem wrote to the Secretary of State for BEIS Kwasi Kwarteng on 19 November 2021, to ask for Bulb to be entered into the special administration regime. With the minister responding on 20 November to confirm his consent to Bulb being entered into the regime.
While the majority of suppliers which have folded in recent months – with high power prices leading to more than half of suppliers collapsing this year – were absorbed as part of Ofgem’s Supplier of Last Resort mechanism, Bulb is too large.
The special administration regime is designed to protect critical services such as water, sewerage and rail transport. It was established in law for the energy sector in 2011, and designed to ensure customers’ energy supplies continue to flow usual as well as protecting the wider energy market.
“Our overriding priority is to protect consumers and the appointment of administrators will ensure the supply of energy remains normal to Bulb customers across the country, providing vital reassurance while an enduring solution is agreed,” energy minister Greg Hands said.