GB’s Bulb latest casualty of energy crisis

British independent supplier Bulb is the 22nd and largest to fall casualty to the sharply risen wholesale gas prices this year.

Bulb with some 6% of the market, approximately 1.7 million customers, is now being placed into ‘special administration’ – the first energy company to do so.

A brief statement from Ofgem says that Bulb will continue to operate as normal and that the regulator is working very closely with government.

“This includes plans for Ofgem to apply to Court to appoint an administrator who will run the company.”

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For the smaller suppliers that fail, Ofgem appoints a ‘supplier of last resort’ from among the larger suppliers, to whom the customers are automatically transferred on their existing contracts and with any credit balances retained.

Special administration, which is required under the 2011 Energy Act, is intended to protect the customers of a large energy supplier with too many to transfer to another supplier.

Bulb was founded in 2015 and supplies 100% renewable electricity and carbon-neutral gas. With rapid growth, the company became the largest renewable supplier and seventh-largest overall in Britain and also has expanded into France, Spain and Texas.

High wholesale gas prices

A statement from Bulb notes its inability to attract investment with the high wholesale prices and the energy ‘price cap’ that is resulting in suppliers providing energy at a significant loss.

“Wholesale prices have skyrocketed and continue to be extremely volatile,” the statement reads.

“The gas supply shortage combined with lower exports from Russia and increased demand means they remain high and unpredictable… The news last week about Nord Stream 2 [gas pipeline from Russia to Europe] has sent gas prices back up again. Last week, Germany suspended its approval process, and there’s growing geopolitical pressure to scrap the project. As a result, the industry has seen many suppliers fail over the past few months.”

Robert Buckley, Head of Relationship Development at Cornwall Insight, described the failure of Bulb as marking dark times for the energy sector.

“This being the biggest failure of a supplier since TXU Energy nearly 20 years ago. Bulb was challenging the industry’s status quo, building up its customer base from a small supplier into a larger one. It will be undoubtedly a sad and worrying time for anyone who works at the supplier,” he said.

“The failure of Bulb highlights the stress suppliers have been under this autumn. Suppliers have been squeezed with the default tariff price cap limiting the amount they can charge and a wholesale market price that has far exceeded this.”

Bulb – whose European and US businesses are separate and not immediately affected by the special administration process – is the 22nd supplier to fail since the beginning of September and is unlikely to be the last during the winter months.

Over 2.1 million customers, primarily domestic, have been impacted by the failures of the twenty-one other suppliers. These have ranged from a few hundred customers up to the largest, Avro Energy, with approximately 580,000 customers, who were transferred to Octopus Energy.