“I don’t think we’ll survive the winter”: a call for help from a small energy supplier | Energy industry
Energy supplier Green has warned that it is one of those small suppliers threatened with bankruptcy due to record market prices for gas and electricity.
“I don’t think we’ll survive the winter if there isn’t a big change,” said Peter McGirr, CEO of the startup, which was founded in 2019 and has more than 250,000 customers and 185 employees.
This recent record rise in energy market prices threatens to force the company to shut down by the new year, unless the government and regulator agree to throw a lifeline on small suppliers.
McGirr said crisis talks held over the weekend by Business Secretary Kwasi Kwarteng had not included the small suppliers most vulnerable to the energy market shock and said calls for the His company’s help with the industry regulator had “fallen on deaf ears.” .
Record-breaking energy prices have already claimed five suppliers in the past five weeks, with four more expected to drop by the end of the month.
McGirr said there would be “one more tsunami to come” because small suppliers don’t have their pockets deep enough to withstand soaring costs without passing them on to their customers.
“We are an independent company,” he said. “It is difficult to access funding and nothing has been done to help. “
McGirr said his company had already achieved a healthy profit margin of around 3.5% on its energy deals, but all suppliers in the market are currently suffering a net loss as costs have risen faster than the regulator’s cap on energy deals. energy tariffs.
Around 40% of Green’s suppliers pay for their energy through a standard variable tariff which is controlled by Ofgem through the energy price cap. The cap is expected to be lifted in October and is expected to rise again in April, but McGirr said the hikes won’t come soon enough to save struggling businesses.
“I am against price caps,” he said. “There is a built-in delay and we have to pass higher prices on to customers to recover our costs. “