Suffolk energy company raises concerns about future of industry
- Credit: PA Wire/PA Images/Zog Energy
A Suffolk energy company has signed an open letter to the government calling for help for gas providers after the collapse of a number of firms in recent weeks.
Rising gas prices and the impact of Covid has taken its toll on the sector with a number of small companies failing recently.
Wholesale prices for gas have surged 250% since January, with a 70% rise since August alone.
Four firms have already folded and there are fears that more could follow.
Zog Energy based at Adastral Park, Martlesham is one of 15 small energy suppliers that has signed an open letter calling on the government to prevent companies like themselves from going under this winter.
"We feel our voice, as suppliers of all different sizes, has not been heard," read the the letter.
"Yet we are all in the market together and experiencing the same conditions, if not exacerbated due to our size with access to financial support/credit lines."
Tony Chester and Andrew Cleveland, who founded the company, said that while they didn't have fears for their own company's survival they were worried about competition in the industry.
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"We are going to end up with less competition and less choice for the consumer," said Mr Cleveland.
"We could down to 10 suppliers by the end of the winter period."
At it's height the industry boosted 60 - 70 different providers.
One of the issues facing the industry, they said, was the cap on prices by Ofgem which kept prices artificially low.
This effectively meant that new consumers signing up with suppliers were a loss to the company.
"I think there should be some sort of support," said Mr Cleveland.
"For most suppliers it would be a short term cash flow issue they are trying to work around."
"I think it will be a difficult time for suppliers over the winter," said Mr Chester.
Foreign Office minister and Braintree MP James Cleverly said he was “not going to speculate” over whether the Government would step in.
Pushed on whether he was therefore not ruling out the Government bailing out firms, he added: “We are considering a range of options.”
But he said the Government wanted energy firms to “stay afloat organically”.