The UK government is considering loans to energy suppliers to help them survive the current gas price crisis, according to reports today.
Bulb, the UK’s sixth-largest energy company, is the latest to seek emergency funding to help it cope with a surge in wholesale gas prices that has seen them rise 250% so far this year.
Four other suppliers are being reported to be in serious difficulty and industry commentators predict the number of small energy providers could shrink to just ten by the end of 2021 from 55 at the start of the year.
Industry meanwhile warned of potential blackouts in the event of a harsh winter.
Kwasi Kwarteng, the Business Secretary, is to host a roundtable with the energy industry and consumer groups to discuss the crisis, having discussed measures with energy regulator Ofgem to maintain supplies.
“We are working hard to manage the impact of global gas price rises,” Kwarteng said yesterday, adding that contingency plans already exist for the government to step in and appoint a special administrator to keep supplies going to customers of a failed energy firm.
Energy groups want these widened and the government to set up a state-backed organisation to cover the costs of taking on customers from firms that fail or even to take over running them in the event of a collapse.
A freeze on VAT or the green levies on energy bills were other options said the be under discussion to ease the pressure.
Prime Minister Boris Johnson blamed the problem on the surge in demand across the globe as economies came out of lockdowns. In the worst case, the crisis might last for months, he added.
Industry, meanwhile, has warned there could be a national crisis over the winter and even a return to a three-day week unless prices come down.
Andrew Large, chairman of the Energy Intensive Users Group, told The Telegraph: “It is potentially catastrophic. We’re already seeing plant closures at a time of year when the weather is still warm and domestic heating is low. Fast forward two months and this could be an acute crisis.
Energy UK said: “Given the unprecedented situation in the market, because of the high international gas price, it is absolutely the right thing for the Secretary of State to be meeting with industry to try to identify if more support is needed.”