29 UK Energy Suppliers Collapse, Leaving Millions of Customers in Chaos

Between 2021 and 2022, 29 UK energy suppliers collapsed in quick succession as wholesale gas prices surged. The companies — including Bulb Energy (the UK's 7th largest supplier with 1.7 million customers), Avro Energy, People's Energy, and many others — had been operating with inadequate financial reserves, failed to hedge against price rises, and were unable to absorb the cost increases.

The collapses affected approximately 4 million customers who were transferred to other suppliers, often at significantly higher tariffs. Customers who had credit balances with failed suppliers lost some or all of their money. Direct debit payments went missing. Smart meters stopped working.

The root cause was years of lax regulation by Ofgem, which had allowed dozens of thinly capitalized companies to enter the energy market without adequate financial checks. Many of these companies offered unsustainably low prices to attract customers, failed to hedge their energy purchases, and had no financial buffer when prices rose.

The cost of the supplier failures — including the Bulb Energy bailout and Supplier of Last Resort (SoLR) costs — was estimated at £2.7 billion, which was passed directly onto all UK energy bill-payers through their bills. This meant that responsible consumers who had chosen stable suppliers were forced to pay for the failures of companies they had no relationship with.

Ofgem subsequently tightened its licensing requirements and financial stress tests for energy suppliers, but critics argued these reforms came years too late.