As the economic crisis intensifies, more households and businesses are finding themselves unable to pay their basic household bills. In the corridors of the country’s largest energy suppliers, executives have been watching anxiously as bad debts accumulate, prompting calls from some for a pre-emptive government bailout. Although there is limited public data available from the lockdown period, anecdotally half a dozen industry chief executives and energy veterans have said that “delinquency rates” among business customers are soaring, while the number of households cancelling their direct debit remains relatively low.
Telegraph 25th May 2020 read more »
Energy companies could go bust because of a surprise £500 million bill for keeping the lights on during the coronavirus pandemic, SSE has warned. National Grid is spending more than twice as much as usual balancing Britain’s power network as the national lockdown hits electricity demand and forces it to pay plants to switch off. SSE said that this sudden jump in so-called balancing costs — which normally are passed straight on to generators and suppliers — would have a “significant commercial impact” and could lead to “some parties being unable to continue to operate”. If generators were to go out of business, this would harm security of supply, while more supplier failures would damage competition, the FTSE 100 energy group said. In an urgent request to Ofgem, the industry regulator, SSE argued that the £500 million bill for extra costs that National Grid had incurred dealing with recent low demand should be deferred until next year.
Times 25th May 2020 read more »