UK energy company Bulb buckling under high prices
London-based energy company Bulb said November 22 it was going into special administration due to soaring energy prices.
Bulb boasts some 1.7mn customers in its portfolio, but joins the growing list of companies struggling under the pressure of increased gas and power prices. It entered into special administration, a move “designed to protect the customers of a large energy supplier that’s become insolvent.”
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“When we started exploring fundraising options, we were delighted to receive lots of interest from investors to fund our business plans and future growth,” it said. “However, the rising energy crisis in the UK and around the world has concerned investors who can’t go ahead while wholesale prices are so high and the price cap—designed to protect customers—currently means suppliers provide energy at a significant loss.”
The UK market has seen natural gas prices spike from year-ago levels of £0.50/therm to close to £4.00 ($5.37)/therm.
Walid Koudmani, a market analyst at broker XTB, said the market situation for companies such as Bulb is increasingly bleak.
“As today’s announcement further reduces competition in the market, it could lead to a scenario where only a small number of major players are left in the energy market once issues are settled and things return to normal,” he said in a statement emailed to NGW.
Bulb said it did not expect the market to cool off anytime soon. A German decision last week to suspend certification of the Nord Stream 2 natural gas pipeline added another premium to the price of natural gas just as the European market is expected to see demand increase due to the onset of winter.
“As a result, the industry has seen many suppliers fail over the past few months and many more are expected to do so over the winter,” the company stated.
Bulb will continue to operate with no disruption to service or adjustments to fees.