The energy crisis in Europe has become a serious test for the British economy. The country is witnessing a wave of energy company bankruptcies, which are already affecting more than a million households. Electricity prices are rising rapidly, following the decline in gas supplies from Russia to Europe.
On Wednesday, two British energy companies working with end-users, Avro Energy and Green Supplier, announced the work stoppage due to record electricity prices. Avro served about 580,000 customers, Green about 255,000 UK customers. Together, the two companies accounted for 2.9% of the UK domestic energy market, transfers Sky News.
Utility Point and People’s Energy, which had more than 500,000 customers, went bankrupt last week. And then the companies PfP Energy and MoneyPlus Energy, which served almost 90 thousand consumers, were forced to terminate. Thus, the total number of households in the country affected by the wave of bankruptcies of energy companies approached 1.5 million.
As the Green Supplier explained, “the current market conditions are unprecedented”: record wholesale energy prices are forcing Green, like all other energy suppliers, to sell energy to consumers at a loss.
British regulator Ofgem assured, that in the near future he will choose a new supplier, and customers of Avro Energy and Green Supplier will not lose the money transferred for electricity and gas in advance.
In September, electricity prices rose sharply in France, the Netherlands and Germany, and in the UK, the price per megawatt-hour increased almost sevenfold in a year, to a record since 1999. In many ways, the sharp rise in electricity prices is due to the rise in gas prices: on Wednesday, quotations stopped at a step of $ 1000 per thousand cubic meters. The rise in gas prices is influenced, in particular, by the position of the Russian Gazprom, which not in a hurry to increase the supply of raw materials to Europe.
Other factors driving the rise in the price of electricity and gas in the UK were the aftermath of Brexit and the abnormal summer heat.
Amos Hochstein, senior adviser to the US president on energy security, said that events could develop even more dramatically, and in this case, gas reserves in Europe will not even be enough to heat residential buildings. The rise in electricity prices in Europe can lead to a sharp rise in the cost of fertilizers and food, writes The Bell.
The energy crisis is already affecting the UK food industry. It led to the closure of a plant for the production of carbon dioxide used in the manufacturing of food and beverages. The government was forced to allocate tens of millions of pounds to subsidize this production.