Zog Energy has become the latest supplier to cease trading, as tight market conditions continue into December.
The supplier had around 11,700 domestic customers, which will now be taken on by a Supplier of Last Resort (SoLR) following a bidding process run by regulator Ofgem.
It follows 11 suppliers collapsing in November, including Bulb, the seventh biggest supplier in Britain. Due to its size it has been placed into the Special Administration Regime, with the government setting aside £1.7 billion to support the supplier.
All the other suppliers to have shuttered this year – with Zog taking the total up to 27, leaving 27 in the market – have been taken on by other suppliers through the SoLR mechanism. For example, ScottishPower this week took on Entice Energy and Orbit Energy’s 70,400 customers.
Goto Energy, Pure Planet, Colorado Energy, Daligas ENSTROGA, Igloo Energy, Symbio Energy, Hub Energy, Green Network Energy, Simplicity Energy, Avro Energy, Utility Point, People’s Energy, PfP Energy and MoneyPlus Energy have all also ceased to trade this year.
The collapses have been largely driven by the dramatic increases in power prices in Britain, caused by high gas prices. For example, day-ahead wholesale prices averaged at £126.14/MWh in Q3 2021, up 69% from the previous record of £74.85/MWh set in just the previous quarter, according to EnAppSys.
By the end of Q3, the breakeven price of gas was £140/MWh – £195/MWh, almost double the price at the start of the quarter.
These high prices have led to challenges when combined with the price cap, putting suppliers in a position where they have to sell energy at below market rates if they aren’t sufficiently hedged. In response to the slew of collapses, Ofgem has announced a consultation into the price cap methodology.