Goto Energy has become the latest of a series of gas and electricity suppliers to go bust as the sector struggles to cope with record high gas prices.
The collapse of the Kent-based renewable energy supplier, which was set up in 2019, brings the total number of failures this year to 16. Ofgem, the energy regulator, is appointing a new supplier for its 22,000 customers.
Prices of wholesale gas have risen 250% since January, partly because of low storage levels after an especially cold winter in Europe last year, as well as because of increased energy demand from Asia and low wind speeds affecting output from renewables.
Since the start of August, the Europe-wide squeeze on energy has pushed 14 UK firms out of business, as they have been unable to weather the surge in gas prices, largely because they could not pass all of the increased costs on to their customers.
Last week, the BP-backed renewable energy firm Pure Planet, Daligas and the specialist provider Colorado Energy went under within 24 hours of each other, resulting in the displacement of 250,000 customers.
With a predicted long and cold winter on the way, there are fears that the greater demand for gas will worsen the crisis and keep prices sky-high until 2023.
On its website, Goto Energy said: “Customers need not worry – their supplies are secure and funds that domestic customers have paid into their accounts will be protected if they are in credit. Ofgem’s advice is not to switch, but to wait until they appoint a new supplier for you.”
Sign up to the daily Business Today email or follow Guardian Business on Twitter at @BusinessDesk
Ofgem has already done this for many customers of the other failed energy firms. Under its supplier of last resort scheme, people will be moved to a new provider, with no interruption to their gas or electricity supply.
Ofgem said customers should take a meter reading so that they are ready when their new supplier gets in touch.
Justina Miltienyte, energy policy expert at Uswitch, said: “It is important that Goto Energy customers do not do anything until they are moved to a new supplier, as trying to switch providers could create administrative delays in getting your credit balance returned.
“Once a move has been completed, the best advice for most consumers is to still hold tight. If you’re on a standard variable tariff, it’s unlikely there will be a better-value deal to switch to due to the protection of the price cap and the current wholesale price situation.”
