Daligas becomes latest energy supplier to crash amid ‘unprecedented conditions’ | Business News

The energy supplier Daligas is set to become the industry’s latest victim as the company folds under the pressure of record high wholesale prices and volatile market conditions.

It was the third to collapse this week.

The London-based company, which has 9,000 customers, said that it was unable to keep its team and its business operating because of the crisis currently roiling the energy sector.

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Business sec on gas prices cap and fuel costs

It blamed “unprecedented conditions” – including the UK’s price cap on energy and soaring wholesale prices – on the supplier’s collapse.

So far, more than a dozen energy firms have gone out of business since the start of September as they struggle to contend with wholesale prices.

Pure Planet and Colorado Energy said they had ceased trading on Wednesday evening, and Ofgem later confirmed their respective customer bases would be allocated a new supplier in the coming days.

BP-backed Pure Planet, which has 235,000 households on its books, ran into difficulty when the energy giant refused additional funding.

Colorado Energy had just 15,000 customers.

The regulator’s statement said: “Under Ofgem’s safety net, customers’ energy supply will continue and funds that domestic customers have paid into their accounts will be protected, where they are in credit.

“Customers of these suppliers will be contacted by their new supplier, which will be chosen by Ofgem.”

The demise of Pure Planet and Colorado means that 14 small suppliers have collapsed this year – 11 of them over the past six weeks.

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They have been hurt by business models that expose them to near-term delivery contracts for raw energy, which have shot up – by more than 500% at one stage this year – because of a range of pressures on supply Europe-wide.

They include gas storage shortages after a cold end to last winter and stiff competition from Asia to replenish stocks.

In the UK, poor weather conditions for wind generation have raised demand and a fire at a power interconnector with France in Kent last month are also contributory factors.

The consequences of the energy crunch have been wide-reaching before winter even hits.

Business Secretary Kwasi Kwarteng has appealed for Treasury help to support high users of energy in industry – such as steel and chemical plants – amid warnings that unprecedented rises in costs will force them to shut down.

Sky News