The record energy market surge has claimed its first casualties after two UK suppliers collapsed, leaving almost 100,000 customers without an energy supplier. PfP Energy and MoneyPlus Energy both ceased trading as the UK’s gas market reached a fresh record high on Tuesday while electricity market prices surged to levels not seen since 2008.
A string of similarly small suppliers are expected to collapse this winter as the companies shoulder the heavy costs of higher market prices before the cap on standard energy tariffs lifts from October.
On Tuesday, UK gas prices reached a record high of 136.68 pence per therm, according to commodity market experts at ICIS. Meanwhile, electricity prices climbed to £128.13 per megawatt-hour, for the first time in 13 years.
The historic electricity price highs were bolstered by a strong demand for gas-fired power and a slump in wind speeds that has curtailed renewable energy generation this week. The electricity system operator was forced to ramp up coal plants to meet 5% of the power demand in England, Scotland and Wales, the biggest reliance on coal power since the unseasonably cold weather in March, despite balmy weather and relatively low electricity demand.
The UK’s fast-rising energy markets mean millions of UK households will face some of the steepest energy bills in the last 10 years this winter, and smaller energy suppliers will run the risk of going bust as they struggle to control costs.
In addition to shouldering the rising cost of energy, UK suppliers also face an annual deadline to hand over millions in renewable energy subsidies collected from bills to pay renewable energy developers. The annual 31 August deadline has proved fatal to small suppliers in the past. Those that miss it have until the end of October to meet a late payment deadline, plus penalty charges, before the regulator begins the process of stripping them of their supply license.
There has never been a better time to generate your own electricity.
Typically, people are currently paying between 15p and 20p for electricity. By generating your own renewable energy with solar panels for example, you reduce the need to buy electricity at ever increasing prices – that’s already a big win!
Then, if you are using more of the energy you generate on site, you will get a greater return. For example, a typical domestic system of 4.5kW with 80% on-site usage will generate an average of 10% return, as well as over 2.1 tonnes annually of carbon reduction.
Increasingly, batteries are playing a more important part in renewable energy, enabling you to purchase energy on much cheaper tariffs at off-peak times (often just 4-5p in comparison to the higher typical rates of 15-20p), which means you can store and use that power for your vehicle, home or business use during the day to offset more expensive power. In conjunction with solar, the justification looks even better as the solar panels can also charge up the batteries, helping to provide free energy at all times of the day.
With a solar PV and battery package, you can store energy that you generate from the sun during the day and use it in the early mornings and evenings when you would normally have to buy energy from the grid, thus minimising how much energy you need to purchase. If you also combine this with an agile energy tariff from Good Energy, you can ensure that you are always buying the cheapest possible energy based on your typical usage.
For more information and to see what package might best suit you, visit our Solar PV & Battery Packages page.