The UK energy market could shrink to just five suppliers by next spring, warns Scottish Power’s CEO.
Keith Anderson argues soaring wholesale prices means there is a “significant risk” the market down could return to a new Big Six, with smaller firms forced to cease trading.
Since the start of September, 19 energy firms have collapsed, leaving just 25 suppliers left in market that has halved over the course of the year.
Suppliers with customers on tarriffs linked to the energy price cap are losing around £1,000 per customer, and can’t pass the costs on through bills.
This has meant challenger companies with smaller reserves have struggled to cope with the changing market conditions.
Anderson told Bloomberg: “For some of these companies, that’s too far away between now and then they will have customers defaulting onto the price cap and it will drain the cash reserves to quickly and to such an extent they will not be able to survive.”
His latest comments follow calls from him last month to scrap the price cap, which Ofgem has currently set at £1,277 annually per person for average use.