- Ofgem granted an initial amount of £1.83 billion as compensation to help the energy firms which had taken over the customers of collapsed energy providers.
- This amount is expected to increase further and will most likely be funded by gas and electricity bill payers
The UK’s energy regulator Ofgem said on Wednesday it disbursed an initial amount of £1.83 billion as compensation to help the energy firms which had taken over the customers of collapsed energy providers.
Healthier energy firms took over the customers of their erstwhile competitors through Ofgem’s Supplier of Last Resort (SOLR) scheme. Ofgem’s compensation scheme aims to help these firms absorb the additional costs. About 26 energy providers have collapsed in recent months amid soaring prices.
Ofgem’s grant is expected to increase further and will most likely be funded by gas and electricity bill payers. On Wednesday, several energy suppliers warned that energy bills are set to surge even further in 2022. Energy prices have soared by over 500 per cent in just over a year.
Renewable energy firm Good Energy (LON: GOOD), French energy utility company EDF and industry body Energy UK have called on the government to intervene, according to a Financial Times report. EDF added the government must act immediately in order to help customers.
In view of this, let us take a look at 2 FTSE-listed energy stocks in the electricity sector and their investment prospects:
- Good Energy Group PLC (LON: GOOD)
Good Energy is a renewable electricity firm. And is a constituent of the FTSE AIM All-Share index.
Company’s power and gas prices (on a day-ahead basis for December) were costlier by 36 and 35 per cent respectively, compared to the previous month.
Higher gas & power prices and other factors are expected to further lower its FY 2021 profits estimate by about £3 million, compared to its update as of 25 November.
Good Energy’s shares closed at GBX 240.00, lower by 4.00 per cent on 22 December. On the other hand, the FTSE AIM All-Share index ended at 1,183.81, higher by 0.87 per cent.
The company’s market capitalisation was at £41.96 million, and it had netted shareholders a return of 40.35 per cent in the past one year, as of date.
Image Source: Refinitiv
- SSE PLC (LON: SSE)
SSE is a multinational energy company that is a constituent of the FTSE 100 index and is a part of the electricity sector index on the LSE.
The group estimates its full year adjusted earnings per share (EPS) to be in line with analysts’ forecasts of 83 pence, subject to certain conditions.
The group aims to have a net debt to EBITDA ratio of about 4.5x as on 31 March 2022.
SSE’s shares closed at GBX 1,637.50, up by 0.21 per cent on 22 December, while the FTSE 100 index ended at 7,341.66, up by 0.61 per cent.
The company’s market capitalisation was at £17,451.19 million, and it had netted shareholders a return of 10.23 per cent in the past one year, as of date.
Image Source: Refinitiv,