A further two energy suppliers have ceased trading as wholesale gas prices continue to soar, regulator Ofgem has announced.
Pure Planet and Colorado Energy, who have a combined 250,000 UK customers, have become the latest failures after nine other small energy supplies went bust since the start of September.
The 100% renewable energy supplier Pure Planet supplies gas and electricity to around 235,000 domestic customers.
In a statement, the firm’s co-founders Andrew Ralston, Chris Alliott and Steven Day said: “We are heartbroken that Pure Planet has entered the Supplier of Last Resort (SoLR) process due to the global energy crisis and the way it has impacted the GB supply market“.
“The government’s price cap, while protecting consumers from sky-rocketing global wholesale energy prices, is not matched by anything which protects suppliers,” it continued, adding, “Instead suppliers are being asked to fund the difference between the record costs of wholesale energy and what they are allowed to sell it for to consumers.“
“Suppliers are increasingly unable to cover their costs. Too many have gone bust already, and more will in the future unless something changes,” the statement read.
Meanwhile, Colorado Energy, which has some 15,000 domestic customers, has had to cease trading due to the current crisis facing small suppliers.
The price of gas, which makes up over a third of the UK’s electricity production, has quadrupled since the start of the year and has increased sharply in the past few months.
A global shortage of gas has increased prices around the world, with demand rising as economies emerge from the Covid-19 pandemic.
The last winter was a long and cold one across Europe and Asia, increasing demand for heating and leaving gas stocks depleted.
It has helped create huge problems for industries that use large amounts of electricity.
Ofgem has announced it will protect the customers’ supply of energy and credit in accounts.
Neil Lawrence, director of retail at Ofgem, said: “I want to reassure affected customers that they do not need to worry: under our safety net we’ll make sure your energy supplies continue.
“If you have credit on your account the funds you have paid in are protected and you will not lose the money that is owed to you,” Lawrence added.
“Ofgem will choose a new supplier for you and while we are doing this our advice is to wait until we appoint a new supplier and do not switch in the meantime,” he stated, noting, “You can rely on your energy supply as normal. We will update you when we have chosen a new supplier, who will then get in touch about your tariff.”