With global energy cost increasing, in the UK we have been seeing an increasing my of suppliers go out of business.
There has been a lot written about htis in the media recently, but as ever it always good to look at the actual numbers rather than the headlines. So after crawling through various websites, I was able to gather the data and I was surprised to see the extent of the issue, the total number of customers impacted and just how big an issue it is in 2021. Over 2 million customer accounts have been impacted, this year alone.
The regulator protects these customers and as a matter of course customers are transferred to new suppliers as part of this process.
This process is an open bidding process… So, following my nose, I thought it would also be interesting to see who is picking these customers up. It could be a good indicator of stable suppliers or maybe just those that are just aggressive in the market.
The big 6 players are there as expected, however also some of the new more active challenger entries to the market too (esp Octopus). This process however is moving significant numbers of customers around and onto their books (about 10% increases in some cases I believe).
This is a process that needs to be done with some care, customer transfers all need to be operationally managed, an exercise in itself.
From the customer point of view this is also a significant change. Many customers will be those that already actively look for cost-effective energy at low prices. They will likely be transferred to a variable tariff and could see price increases. As much as 50% in some cases.
For those in financial difficulty, or already needing financial support this change could significantly effect cash flow and push them into arrears.
It is something the new energy suppliers will need to be ready for and have associated support and replacement tariffs ready.
With all the turmoil the final question is who is left and who is next.
Looking through the data at Ofgem it did seem like there was a relationship between Ofgem notifications and warnings (eg contribution to environment funds), and suppliers ceasing to trade in the future. It is no clear guide of course.
What is clear however is cash flow can really help, and the collections/account receivable process can really help to unlock free cash flow in a business.
If it is not already too late this is something that is worth reviewing urgently.
I have included all the detailed data. This includes details of all domestic energy suppliers and those that have ceased to trade (with rough customer estimates – although this may not be accurate).
If you would like a full copy of the spreadsheet and the data itself please just drop me a note.