Consumers urged not to worry about lack of electricity this winter
Consumers have been urged not to worry about power shortages this winter, amid fears of an energy crisis.
With gas prices at record highs, energy utilities are losing “a lot of money” to the government’s price caps, which are in place to prevent instant increases in customer bills.
Industry leaders have offered their assurances over concerns that people will be without electricity to heat their homes during the winter.
It comes as a steel trade association warned of possible “long-term damage” to the industry.
Ovo chief executive Stephen Fitzpatrick told the BBC’s Andrew Marr Show on Sunday morning: “The one thing I want to reassure everyone about, in terms of consumers, there is really nothing that consumers are doing. have to worry in terms of lights going out this winter or not being enough power.
“Because of the price cap, they are protected from the worst of it all.”
Dermot Nolan, former chief executive of Ofgem, told LBC that it is “likely” that many energy companies will start to shut down.
However, he added: “But I don’t think that’s a problem. It’s not great, but I assure anyone who is worried about whether their business will close or not.
“I will assure them that you stay where you are, you will be taken care of, you will be protected, you will effectively be transferred to another provider and your credit balance will be preserved.
“So while it’s never great to hear about the shutdown of the company you work with, you will be transferred to someone else, you will be taken care of, so I urge people not to worry about it. “
Mr Fitzpatrick also warned that many energy companies would have “tough times.”
He said: ‘There are a lot of companies in the market that have sprung up quite recently, there has been great competition in the UK market, consumers have benefited.
“But I think over the past two years it has become too easy to enter the energy market. It’s a very complicated industry and I think some people have underestimated the risks and how complicated it is.
Mr Fitzpatrick said gas prices had climbed 1000% in 12 months.
Speaking about price caps for consumers, he added, “Right now, if we buy gas and electricity on the wholesale market, energy companies are losing a lot of money for every unit they sell.
“So if a business were to go out of business and another energy supplier takes over these customers and then has to buy that energy, they will sell it at a huge loss.”
The chief executive of the Energy UK trade association said “exposed” businesses such as energy-hungry users and retailers would be hit the hardest.
Emma Pinchbeck told Sky News’ Trevor Phillips on Sunday: “We expect more retailers to go bankrupt this winter. We had about 50 suppliers when we started, and we expect more to leave the market.
“We’ve had a consolidation process, we’ve had retailers that have left the market in previous years.
“The problem is how many fail at once and whether our mechanisms, which are in place to deal with customers when that happens, are ready for so many failures at one time.
“And of course, what that means for the retail business on the other side, in the spring or when prices return to normal.”
Meanwhile, UK Steel Managing Director Gareth Stace said: ‘Currently UK steelmakers face energy prices five times higher than last year’s average, in addition to a remarkable price volatility.
“As such, longer and more frequent production breaks are becoming a reality for some UK steelmakers.
“These circumstances are simply not sustainable for the industry. We urge the government to take measures, as has been done in Italy and Portugal, to support the sector.
“Failure to do so can cause long-term damage to the future of the UK steel industry.
“As the winter months approach, price increases could lead to prolonged shutdowns, damage to equipment, loss of export opportunities and market share in the country, as well as a loss of talent and jobs. “