Ofgem has confirmed two more energy supplier exits, with the loss of Avro Energy resulting in the single biggest failure the market has ever seen.
Avro served 580,000 customers, representing a 2 per cent market share. Newcastle-based Green meanwhile, which had 255,000 customers, confirmed earlier today (22 September) it was ceasing to trade.
The latest losses take the total number of failures so far this year to nine, equalling the previous record set in 2019.
Both Avro and Green were shown to have entered Elexon credit default over the past few days, with the code administrator proposing to expel Avro from the Balancing and Settlement Code.
Peter McGirr, founder and chief executive of Green, had previously told the BBC he had appointed Alvarez and Marsal on an “advisory and restructuring” basis, but admitted Green could fall into administration within weeks.
Founded in 2019, Green was ranked number one for customer service in the Citizens Advice Q3 2020 star ratings. It employs 185 staff.
In a press release sent out this afternoon, Green blamed its failure on “unprecedented market conditions and regulatory failings”, as well as a lack of government support.
In the past week it, along with 14 other similar-sized retailers, wrote a joint letter to Ofgem, Boris Johnson, chancellor Rishi Sunak and business secretary Kwasi Kwarteng asking for the energy price cap methodology to be reviewed and for an immediate support package to be assembled.
The release also blamed the impact of the pandemic on its demise, citing lockdowns which led to greater usage and Ofgem-mandated payment holidays for vulnerable customers.
The retailer added: “Green fears that smaller energy suppliers are being left behind by the government, with rescue packages being put in place for larger suppliers and for private discussions to be held with the business secretary.
“There is a position in government and Ofgem that smaller suppliers should be left to fail, despite the unprecedented increases in wholesale electricity and gas, the cost of failed suppliers being mutualised across the industry, and an outdated price cap methodology forcing smaller suppliers to sell at a loss.”
Neil Lawrence, director of retail at Ofgem, said: “Ofgem’s number one priority is to protect customers. We know this is a worrying time for many people and news of a supplier going out of business can be unsettling.
“I want to reassure customers of Avro Energy and Green Supplier Limited that they do not need to worry. Under our safety net we’ll make sure your energy supplies continue.”
Avro and Green join Utility Point, People’s Energy, PfP, Money Plus, Hub, Simplicity and Green Network Energy.
Industry experts believe the continuing situation in the wholesale market will likely lead to yet more failures.