https://sputnikglobe.com/20210921/uk-is-heading-back-to-oligopoly-in-energy-sector-bankruptcies-on-the-way-as-prices-surge-expert--1089268729.html
UK is 'Heading Back to Oligopoly' in Energy Sector, Bankruptcies on the Way as Prices Surge: Expert
UK is 'Heading Back to Oligopoly' in Energy Sector, Bankruptcies on the Way as Prices Surge: Expert
Sputnik International
The United Kingdom has been particularly hard hit by a rise in energy costs as soaring gas prices have left the whole region reeling with uncertainty. 21.09.2021, Sputnik International
2021-09-21T11:58+0000
2021-09-21T11:58+0000
2021-09-21T11:58+0000
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Britain should fear more insolvencies in the energy sector, industry experts have warned as the сountry is battling a 250%+ surge in natural gas prices, according to CNBC.Founder of UK supplier Utilita Energy Bill Bullen told CNBC that bankruptcies were inevitable in Britain’s privatised energy industry, as it was clearly “heading back to an oligopoly at this rate”.Britain’s sixth-largest supplier Bulb announced on Sunday that it was seeking a bailout; four other energy firms have recently gone out of business.Robert Buckley, a head of relationship development at Cornwall Insight research group, predicts that many energy suppliers will leave the British electricity and gas market. He says that they will be unable to sustain their lack of profitability resulting from a limit on tariff charges and rising costs for long:"[Suppliers are] caught between this rapture of the rising energy price wholesale market and the default tariff cap, and depending on who you believe, this is anywhere up to £200, £250 [$273, $341] below what a market-related cost would be at the moment, so that's 20% of the total bill," Buckley explained.What’s Happening in Europe’s Energy Market?The whole region is struggling from a spike in the price of gas, which generates approximately a fifth of Europe’s energy. A disruption in supplies, competition for gas between Europe and Asia, and other factors have contributed to significant shortages and a resulting surge in prices.Other sources of energy, such as coal and wind, were unable to make up for the mounting demand, leaving the region with an unprecedented crisis, especially in the UK, where the slump has been particularly acute due to its lack of connectedness to Europe’s power grid.Industry group Oil & Gas UK said the wholesale price of gas had gone up 70% in the last month alone and 250% since January. According to the group’s energy policy manager Will Webster, the situation will make the UK “even more reliant on imports”.Meanwhile, British Prime Minister Boris Johnson has described the pricing crisis as “temporary”, with the government reportedly eyeing bailout loans for energy suppliers to stay afloat.
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UK is 'Heading Back to Oligopoly' in Energy Sector, Bankruptcies on the Way as Prices Surge: Expert
Aleksandra Serebriakova
Sputnik correspondent specializing in foreign affairs.
The United Kingdom has been particularly hard hit by a rise in energy costs as soaring gas prices have left the whole region reeling with uncertainty.
Britain should fear more insolvencies in the energy sector, industry experts have warned as the сountry is battling a 250%+ surge in natural gas prices, according to CNBC.
Founder of UK supplier Utilita Energy Bill Bullen
told CNBC that bankruptcies were inevitable in Britain’s privatised energy industry, as it was clearly “heading back to an oligopoly at this rate”.
Britain’s sixth-largest supplier Bulb
announced on Sunday that it was seeking a bailout; four other energy firms have recently gone out of business.
Robert Buckley, a head of relationship development at Cornwall Insight research group, predicts that many energy suppliers will leave the British electricity and gas market. He says that they will be unable to sustain their lack of profitability resulting from a limit on tariff charges and rising costs for long:
"[Suppliers are] caught between this rapture of the rising energy price wholesale market and the default tariff cap, and depending on who you believe, this is anywhere up to £200, £250 [$273, $341] below what a market-related cost would be at the moment, so that's 20% of the total bill," Buckley explained.
What’s Happening in Europe’s Energy Market?
The whole region is struggling from a spike in the price of gas, which generates approximately a fifth of Europe’s energy. A disruption in supplies, competition for gas between Europe and Asia, and other factors have contributed to significant shortages and a resulting surge in prices.
Other sources of energy, such as coal and wind, were
unable to make up for the mounting demand, leaving the region with an unprecedented crisis, especially in the UK, where the slump has been particularly acute due to its lack of connectedness to Europe’s power grid.
Industry group Oil & Gas UK said the wholesale price of gas had gone up 70% in the last month alone and 250% since January.
The group predicts that the UK North Sea output will be halved in the next six years unless new fields open.
According to the group’s energy policy manager Will Webster, the situation will make the UK “even more reliant on imports”.
Meanwhile, British Prime Minister Boris Johnson has described the pricing crisis as “temporary”, with the government reportedly
eyeing bailout loans for energy suppliers to stay afloat.
