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Highlights
- 3 more energy suppliers, Enstroga, Symbio Energy and Igloo Energy, stopped trading because of surging gas prices
- The firms have a total of 233,000 customers and account for 1 per cent of UK’s domestic customers
The UK is facing a worsening gas crisis, as three more energy suppliers, namely, Enstroga, Symbio Energy, and Igloo Energy collapsed on Wednesday, due to surging gas prices.
The three companies served a total of 233,000 domestic customers. Enstroga has about 6,000 domestic customers, and Igloo Energy has about 179,000 customers, while Symbio Energy had 48,000 domestic customers and a smaller number of non-domestic customers.
They became the latest companies out of an ever-increasing list of energy suppliers to have gone bust since September due to the ongoing gas crisis. Some of the previous energy suppliers which collapsed include People’s Energy, Green, Avro Energy and others.
A combined total of over 1.5 million people have been impacted by the crisis so far.
Wholesale natural gas prices have more than tripled in 2021 due to several factors, including a global recovery in demand, low reserves, firming commodity and carbon prices and also due to a low wind output.
The UK regulator Ofgem stated the three companies, Enstroga, Symbio Energy and Igloo Energy, represented about 1 per cent of the UK’s domestic customers, and they would still continue to enjoy a seamless supply of energy despite the collapse of their suppliers.
Consumers will be automatically switched to a different supplier and will also have a price cap in place to protect them from rising prices.
Smaller energy suppliers have been adversely impacted as they have been unable to hedge against the gas price shocks. Avro’s customers were switched to Shell Energy, while Green’s customers were transferred to Octopus Energy after they went bust recently.
Let us take a look at 2 FTSE listed energy suppliers and how their stocks reacted to the development:
- National Grid PLC (LON: NG)
FTSE 100 index listed firm National Grid is a multinational electricity and gas company.
The firm filed a three-year rate plan backdated to July 2021 for its upstate New York electricity and gas business, the Niagara Mohawk Power Corporation (NMPC).
According to the proposal, National Grid’s customers would face an average electricity price increase of 2.2 per cent, while its gas customers would face a 2 per cent increase in prices.
The NMPC has 1.6 million electric and 0.6 million gas customers, accounting for almost 30 per cent of the US rate base.
National Grid’s shares were trading at GBX 900.60, up by 0.26 per cent on 30 September at 08:18 AM BST, while the FTSE 100 index was at 7,132.01, up by 0.34 per cent.
The company has a market cap of £ 32,490.68 million and a year-to-date return of 4.16 per
- Centrica PLC (LON: CNA)
FTSE 250 index listed firm Centrica is an international energy services company. It is the parent company of British Gas, Centrica Hive and others.
Centrica’s British Gas agreed to take on the customers from collapsed energy supplier People’s Energy under Ofgem’s Supplier of Last Resort (SOLR) process.
People’s Energy had ceased trading earlier this month on 14 September and had about 350,000 domestic customers and about 500 business customers.
Centrica’s shares were trading at GBX 56.54, up by 0.39 per cent on 30 September at 08:20 AM BST, while the FTSE 250 index was at 23,263.00, up by 0.48 per cent.
The company has a market cap of £ 3,311.97 million and a year to date return of 21.54 per cent as of 30 September.
Bottom Line
UK and Europe’s ongoing gas crisis may also go global, as it continues to deepen ahead of the winter season.
The UK had about 47 or so energy suppliers, of which fewer than 10 are expected to survive the crisis.
Analysts expect that if the sector sees some consolidation in the remaining 6 to 10 companies that are expected to survive, the industry could witness some profitability.
