The energy industry is a vital part of the nation’s economy, supplying over 30 million homes and businesses with electricity, gas, and heat.
During the pandemic, the energy industry worked quickly to address the concerns of its customers.
The high cost of gas has severely affected the energy retail industry’s profitability.
Since August 2021, over 27 companies have already left the energy retail market.
Over the years, the Government and the energy industry have been calling for better regulation. They have also asked companies to be more stable before they can enter the market.
Despite the high cost of gas being passed on to other countries, the UK is still the most vulnerable to the impact of this issue due to its dependence on imported gas.
About 80% of the country’s energy supply is used to heat its homes and businesses while 40% of its electricity is generated from gas-powered plants.
Price cap on utilities
In August last year, the energy regulator Ofgem imposed a cap on the prices that consumers can pay for electricity and gas. The goal of this regulation was to prevent companies from raising their prices quickly.
However, the high cost of gas has led to the collapse of many energy firms.
This is why it is vital that the Government and the energy industry work together to ensure that non-energy customers are fairly priced.
Due to the high cost of gas, many customers switched to the price cap instead of their cheaper fixed-term deals. The sudden collapse of the energy retail industry has also led to the failure of many companies.
Before the crisis, the biggest energy firms were struggling to make a profit due to the high cost of gas.
Due to the sudden and severe cost increases that energy firms have been experiencing, many of them have not been able to absorb these increases.
Despite the changes that the Government and the industry have made to the retail market, some companies have still been unable to pass on the higher costs.
Besides the high cost of gas, other factors such as the lack of room for manoeuvre have also prevented retailers from passing on the higher costs to their consumers.
Working together is vital
The price cap is also not protecting consumers from the high cost of gas. This issue is why it is important that the Government and the energy industry work together to ensure that gas and electricity prices are fairly priced.
Despite the difficulties that the energy industry is experiencing, it still manages to provide its customers with financial assistance. In the past two years alone, energy retailers have been able provide their customers with over £1 million in financial support.
Despite the concerns about the rising cost of energy, many people are still worried that more people will be affected by the high prices of gas. This is because the price of gas is expected to continue to increase.
The Government is currently considering various ways to help consumers avoid paying their energy bills following the price cap increase.
The Government’s goal is to help address the various impacts of the high energy prices on the economy.
It is also important that the energy industry has a resilient and secure supply of energy.
If your business is looking for a competitive fixed price energy supply contract, we are here to help.