So Energy is looking to raise £50 million in capital as the energy sector remains volatile.
The supplier has appointed advisers Interpath to secure the funding, in a move first reported by Sky News and confirmed to Current±.
On LinkedIn, So Energy CEO Monica Collings she said had announced the move to staff the previous day to “ensure they heard it from me first.”
“Market conditions are difficult, and as I’m sure we all recognise the government’s instability has exacerbated the situation. Policies designed to help – like the Energy Markets Financing Scheme – that have been introduced to provide some security contain clauses that prevent mid-sized suppliers from being able to access them,” wrote Collings.
“It’s right that we look to firm up our company’s position and look forward to talking to potential investors about the great things that we have going on within So Energy.”
Collings joined So Energy as CEO in August 2021, when ESB Energy acquired a 75% stake, and the two businesses merged under the So Energy brand.
Over the past year, the company has been vocal in calling for support from the government amid the wider energy crisis. This includes asking for support measure to help the nation pay for a “once in a generation energy bill” in August 2022.
Energy bills for domestic customers in Britain are currently capped at 34.0p/kWh for electricity and 10.3p/kWh for gas, inclusive of VAT, for those on a standard variable tariff. While those on fixed tariffs had their unit prices reduced by 17p/kWh for electricity and 4.2p/kWh for gas from 1 October, both caps set through the Energy Price Guarantee.
This support measure was brought in just weeks before the Default Tariff Price Cap was set to rise to to £3,549 on 1 October, which threatened to throw millions into fuel poverty. The increase in bills in April – when the price cap jumped 54% – alone is expected to have pushed 6.3 million households into fuel stress.
Wholesale power prices have continued to grow and remain turbulent throughout the last few months. This is driven predominantly by high wholesale gas prices, with the war in Ukraine continuing to significantly impact security of supply throughout Europe.
Prices have been fairly stable in recent weeks, bolstered by gas storage reaching capacity and the mild weather throughout October. But with cold weather approaching, fears over soaring power prices and the potential of black outs remains.
The energy crisis began at the end of 2021, when gas prices and therefore electricity prices began to rise due to the impact of Covid-19 lockdowns lifting, cold weather in Asia raising demand and other factors.
With suppliers limited in what they could recoup from customers by the price cap, many that were smaller or unhedged were squeezed. This lead to a significant number folding, along with Bulb being placed into the Special Administration Regime.
While there is more support for the winter 2022/23 period thanks to the Energy Price Guarantee – which will see the government pay for costs above the 34.0p/kWh and 10.3p/kWh cap set out above – high power prices and volatility will likely still stretch many small and mid-sized suppliers.
As mentioned by Collings, there has been significant political instability which is further concerning suppliers. For example, the Energy Price Guarantee was initially set to run for two years from October 2022, but has subsequently been cut to just six months following Jeremy Hunt taking over as Chancellor from Kwasi Kwarteng earlier this month.
Since his appointment, Prime Minister Liz Truss has stepped down after just 45 days and been replaced by Rishi Sunak, a move that was accompanied by a wider cabinet reshuffle. As such, there remains uncertainty around energy policy going forwards.
Since January 2021, the suppliers to shutter include:
Date of collapse |
Supplier |
Customer numbers |
29-Jan-21 |
360,000 |
|
29-Jan-21 |
50,000 |
|
10-Aug-21 |
15,000 |
|
08-Sep-21 |
9,000 |
|
08-Sep-21 |
85,000 |
|
14-Sep-21 |
220,000 |
|
14-Sep-21 |
350,000 |
|
23-Sep-21 |
580,000 |
|
23-Sep-21 |
255,000 |
|
29-Sep-21 |
6,000 |
|
29-Sep-21 |
179,000 |
|
29-Sep-21 |
48,000 |
|
14-Oct-21 |
9,000 |
|
14-Oct-21 |
235,000 |
|
14-Oct-21 |
15,000 |
|
19-Oct-21 |
22,000 |
|
02-Nov-21 |
5,900 |
|
03-Nov-21 |
41,000 |
|
04-Nov-21 |
6,000 |
|
04-Nov-21 |
300 |
|
04-Nov-21 |
14,800 |
|
04-Nov-21 |
2,600 |
|
17-Nov-21 |
5,500 |
|
17-Nov-21 |
30,000 |
|
22-Nov-21 |
1,700,000 |
|
25-Nov-21 |
5,400 |
|
25-Nov-21 |
65,000 |
|
1-Dec-21 |
11,700 |
|
2022 |
||
18-Jan-22 |
176,000 |
|
21-Feb-22 |
262 |
|
21-Feb-22 |
274 |
|
11-July-22 |
3,000 |