UK energy suppliers have nearly halved in number this year, as soaring wholesale prices wreak havoc with the struggling sector.
New research from Cornwall Insights has revealed that the market has sharply decreased from 47 suppliers at the start of 2021 to 24 currently left operating in the country.
The number of departures from the market this year is a record for the sector.
Since the start of September, 19 energy firms have collapsed as the crisis has intensified with wholesale prices increasing by 250 per cent from the beginning on 2021.
This includes CNG Energy on Wednesday and four further firms in the past week alone.
Approximately two thirds of the suppliers are defined by the research as small companies, which have been particularly vulnerable to spiralling wholesale energy costs.
So far, the majority of customers have been moved to larger suppliers.
Consequently, the market share of the large supplier group has grown from 68.5 per cent at the start of the year to 70.1 per cent today.
Anna Moss, head of consumer markets at Cornwall Insight, gloomily predicted that the situation would remain challenging through the winter with no sign that wholesale prices will return to former levels.
She said: “Suppliers are likely to face tough times ahead. Credit calls on suppliers for electricity balancing are due to increase markedly. The Credit Assessment Price (CAP) will increase further to £259/MWh on 4 November – a record high and the tenth increase in the CAP in 2021.”
The consumer markets specialist also pointed to high futures prices, consistently over £230/MWh for monthly baseload power, and 240p/th for monthly NBP gas since the start of last month.
Moss concluded: “The very high wholesale prices have caused significant distress even before winter begins and how suppliers fare is in the hands of wholesale trading parties, and how suppliers can manage their costs through the winter months ahead.”