Shell Energy will take on 255,000 customers from Green, one of seven small energy suppliers that have collapsed in a wave of failures that have forced the energy regulator Ofgem to find new providers for 2 million customers.
Ofgem said former and current customers of Green would have any outstanding credit on their balance honoured under the agreement, with no interruption to supply predicted when Shell takes over on Monday.
Green was the sixth of seven energy suppliers to collapse since the beginning of August, after its chief executive, Peter McGirr, warned in the Guardian that the global rise in gas prices was going to result in a “tsunami” of failures. In total, nine suppliers catering to nearly 2 million households between them have failed in 2021.
Octopus to take on failed Avro Energy’s 580,000 stranded customersRead more
Energy experts at Barina Partners have said there may only be 10 suppliers left by the end of the winter, from 70 at the start of the year.
Ofgem is tasked with finding new suppliers when a company fails, under the “suppliers of last resort” system designed to prevent households being cut off.
Ed Kamm, the chief executive of Shell Energy Retail, said: “We’re a well-capitalised supplier with long-term ambitions to help British households get to net zero emissions.
“We’ve made it clear to Ofgem and the Department for Business, Energy and Industrial Strategy that we are ready to play our part and help support customers of failed energy suppliers and work now turns to welcoming those customers of Green and ensuring they have the best experience they can.
“Shell Energy will be working hard over the coming weeks to bring over all Green customers smoothly and swiftly. Green customers will receive 100% renewable electricity as standard as well as discounts on fuel via Shell Go Plus.”
Kamm said Green customer’s credit balances would be protected and their supply uninterrupted, adding that Green customers should expect contact from Shell in the coming days.
Neil Lawrence, the Ofgem director of retail, said: “We understand that this news may be unsettling for customers, however they do not need to worry. Their energy supply will continue as normal, and customer credit balances will be honoured.
“Shell Energy will be in contact with customers over the coming days with further information. Once the transfer has been completed, customers can switch if they wish to.”
The UK’s wholesale energy markets have reached record highs in recent weeks as multiple factors combined to send the market higher.
Sign up to the daily Business Today email or follow Guardian Business on Twitter at @BusinessDesk
The trouble stems from a global surge in demand for gas after a cold winter that left gas storage facilities depleted, plus a rebound in post-lockdown energy demand across Asia. A race to refill gas stores before the return of colder temperatures has sent market prices surging.
Half of the UK’s electricity is generated in gas-fired power plants. There has also been a higher than normal demand for gas power in recent months after a series of nuclear reactor outages and the recent shutdown of an important power cable that brings in electricity from France.
The UK has also had one of its least windy summers since 1961, meaning wind power has been low. Experts fear the situation will become worse as temperatures become colder.