Newcastle-based 'Green' is latest company to cease trading in gas crisis

  • Emily Reader has the latest

Newcastle-based company Green have become the latest victim of the gas crisis tearing through the energy sector.

The company, which has offices in Newcastle city centre, pointed the finger at 'unprecedented market conditions and regulatory failings'. The firm also criticised what it said was a 'lack of support' from the government for smaller energy companies.

The startup, which launched in 2019, serves approximately 250,000 customers in the UK. 185 people are employed by the firm, but it is not clear if jobs will be lost imminently.

Green's website posted this message after the announcement was made Credit: green.energy.com

Green customers, like Karl Hodgson, are facing an uncertain future. They fear their bills will rise once they are moved to a new supplier.

What should I do if I'm a Green customer?

Upon announcement it was ceasing trading, Green posted this on their website: Ofgem, the energy regulator, is appointing a new supplier for its customers. In the event of an emergency only, where your energy supply has been lost, please contact us on the following number 0345 222 2525. Customers need not worry, their supplies are secure and domestic credit balances are protected. Ofgem’s advice is not to switch, but to wait until they appoint a new supplier for you. 

Spiralling energy costs have led to the suspension of operations at fertiliser plants which produce CO2 as a by-product, having a knock-on effect on the food industry particularly. On Tuesday 21 September, it was confirmed that a deal brokered by Business Secretary Kwasi Kwarteng that the UK Government provide "limited financial support" towards Teesside's CF Fertilisers' running costs in order to prevent a food supply shortage at Britain's supermarkets.

Read the full statement from Green here:

Today, Green, an energy supplier specialising in providing low-cost renewable energy, announced that they are exiting the market due to the government failing to provide any support to smaller energy suppliers.

The current market conditions are unprecedented, with record wholesale energy prices pushing the cost of energy above the price cap. The fire at the National Grid interconnector site in Sellindge on 15th September led to wholesale electricity and gas prices reaching new record highs. Beyond the fire, 2021 has seen incidents at other production sites, unplanned outages, high demand for Liquefied Natural Gas (LNG) tankers, Brexit, the Suez Canal incident, and the Beast from the East II to name but a few.

This means that Green, like all other energy suppliers, are selling energy to customers at a loss. The price cap is calculated based upon a historic observation period, which means that it does not accurately reflect current market conditions.

Over the past week, we have been vocal in calling out Ofgem and the Government for creating a regulatory environment which has led to five energy suppliers collapsing in the last six weeks. Green, in conjunction with 14 other small energy suppliers, wrote to Ofgem, the Prime Minister, the Business Secretary, and the Chancellor of the Exchequer, asking for the energy price cap methodology to be reviewed and for an immediate support package to be assembled. Combined, the signatories account for over 1m customers and 2,000 staff.

Although Green, like many other small suppliers, have been accused by the Business Secretary of bad business practices, the reality is that the soaring energy prices are due to a global gas shortage. This global gas shortage has a significant impact on the United Kingdom due to low capacity and was predicted by the Energy & UtilitiesAlliance (EUA) in 2017 upon the closure of the Rough gas storage facility by Centrica.Additionally, there have been several other factors outside of Green’s control which have had a significant impact. Although much has been written in recent days about hedging positions, there seems to have been little discussion of the impact of government lockdowns, which changed customers usage patterns and led to greater domestic usage than anticipated. As a result, Green was forced to purchase additional energy at the prevailing market rate.

During the pandemic, Ofgem also mandated that energy suppliers must provide payment holidays for customers and a relaxation of credit control - while still requiring that energy suppliers meet all of their payments. This led to an increase in customers debit positions without a mechanism to recover the amounts. © 2021 Green Supplier LimitedGreen fears that smaller energy suppliers are being left behind by the Government, with rescue packages being put in place for larger suppliers and for private discussions to be held with the Business Secretary. There is a position in Government and Ofgem that smaller suppliers should be left to fail, despite the unprecedented increases in wholesale electricity and gas, the cost of failed suppliers being mutualised across the industry, and an outdated price cap methodology forcing smaller suppliers to sell at a loss.

In light of the current market conditions and regulatory failings, Green will cease to trade, and another supplier will be appointed by Ofgem to take over supply of our members.