Oaklands Road in Bridgend, south Wales, is like any other suburban street. Lined with grey and white pebble-dashed 1930s semis, it has caravans parked in some driveways and neatly trimmed front lawns. But one house, halfway along the road, is also the headquarters of an energy company granted a licence to challenge the might of the big six suppliers. Not that you would know by looking at it. Bosses at the company, One Wales Energy, say they found it easy to obtain a licence to supply energy. They simply bought a ready-made firm from another company — a process sanctioned by the energy regulator Ofgem. Things have not gone well for One Wales Energy, however. The company has been unable to raise the £2.5m it needs to start supplying energy, according to Judith Cook, a director. Its latest accounts show it had assets of just £9,375 in October 2017. “We are in the process of winding it down,” said Cook. The business is far from unique. In January 2016, about six months before Ofgem changed its rules to spark more competition, 228 firms held a licence; today there are 315. The number of firms actually supplying energy has nearly doubled from 40 to 73 over the period. However, eight suppliers have gone bust since 2016 — seven of them this year. The failures to date are likely to cost consumers about £63m to cover the debts of collapsed suppliers, according to the comparison site theenergyshop.com.
Times 2nd Dec 2018 read more »
James Coney: The energy market is broken and the boss of Ofgem is to blame. here has been a catastrophic failure of regulation in the energy market — and it is pushing up everyone’s bills. Today we reveal how Ofgem’s bungled attempt to increase competition in the market has allowed hundreds of companies to snap up licences to supply electricity or gas — with hardly any checks made on them. Would-be energy entrepreneurs have been able to pour into the market by handing just a few thousand pounds to energy licence “factories” such as Utiliteam and Utiligroup. This gives them the right paperwork to run a supplier, but not the expertise. Many of these ventures never got off the ground. Others did, then went bust. The regulator Ofgem has now announced a clampdown, saying it will revoke some of the licences, but the damage is already done. Where was the proper oversight to begin with? Seven suppliers have collapsed this year. One industry expert believes 10 more are on the brink. Each time a supplier folds, the bill for repaying the credit built up by its customers falls to all of us. The licence fiasco comes on top of the smart-meter shambles. Newspapers have been reporting on this evolving disaster for years. Has anyone at Ofgem, the suppliers or in government been listening? No — they’ve ploughed on regardless.
Times 2nd Dec 2018 read more »