Trade Association Energy UK – which represents over 100 members – has described record wholesale gas and power prices as a “market-wide crisis” and has criticized chancellor Rishi Sunak for the lack of a clear plan to protect the industry. Speaking to The Financial Times, chief executive Emma Pinchbeck said: “Other treasuries in Europe have already responded to the crisis, but in the UK, the energy sector is still asking if the chancellor knows that energy bills going up by over 50 percent in the new year is a problem for ordinary people, businesses, and the economy.”
Pinchbeck was not alone in her criticism this week, with EDF Energy – the fourth-biggest supplier in the UK – warning the situation was now “critical” as it urged the government to “act now to support energy customers.”
Meanwhile, Good Energy’s shares dropped four percent amid profit warnings, with the supplier downgrading its expected earnings by £3m due to soaring wholesale prices and sustained market volatility.
In a trading update to the London Stock Exchange, Nigel Pocklington, chief executive of the energy supplier described the situation as a “national crisis” and warned that “no one in the industry is immune.”
He said: “We urge the UK government to support the industry at large in navigating these short-term challenges to protect bill-payers and those that serve them
Pocklington attributed the “unparalleled” price hikes to post-lockdown demand, supply and storage shortages, cold winter weather, and escalating geopolitical tensions between Russia and Europe, with the Nord Stream 2 pipeline still waiting to be certified.
The energy firm outlined that power and gas prices on a day-ahead basis for December compared to November have been on average 36 percent and 35 percent more expensive respectively, at £256 per megawatt-hour and £2.71 per therm.
This is in line with Bulb Energy’s statements following its de-facto nationalization through the special administration process, which revealed it was costing them £4 per therm to supply energy to their 1.7m customers, while the current consumer price cap prevented them from charging customers more than 70p per therm.
So far, 25 UK energy firms have ceased trading in the past three months, affecting four million domestic consumers.