Fears grow that energy firm Bulb could collapse next week as government accelerates contingency plans
The government is accelerating contingency plans for the collapse of Bulb, Britain’s seventh-biggest domestic energy supplier – a demise that would mark by far the biggest insolvency of the crisis engulfing the sector.
Sky News has learnt that ministers and officials, along with the industry regulator Ofgem, believe that Bulb – which has around 1.7 million household customers – could collapse as soon as next week, amid diminishing expectations of a rescue deal.
Industry sources said on Friday that talks with a small number of potential buyers were ongoing, but that others had pulled out in recent days.
A solvent rescue remains a possibility, they said, but added that it was highly unlikely that Bulb could survive through November without new funding.
Ovo Energy, Octopus Energy, and Shell Energy Retail are among the rival gas and electricity groups which have had access to Bulb’s financial data in recent weeks.
An executive at one of the companies which had explored a takeover of Bulb said it had liabilities of approximately £600m, making a solvent takeover of the company hard to envisage given the backdrop of wholesale price volatility.
A Bulb spokesperson said on Friday: “Our discussions with multiple parties to secure additional funding continue to make good progress and we’re encouraged by the drop in wholesale energy prices.
“We expect the government to monitor wholesale prices and their effect on the whole industry, but ministers and Ofgem have been clear we must emerge from the energy crisis with a competitive and innovative market, rather than a return to the oligopoly of the past.”
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Lazard, the investment bank, has been engaged in the search for new funding, while AlixPartners, an advisory firm, has been working with Bulb on short-term measures to strengthen its balance sheet.
If Bulb does collapse, it would place at risk the jobs of roughly 1000 people who work for the company, which was launched in 2015 by Amit Gudka and Hayden Wood, and has accumulated a 6% share of the market.
It supplies 100% renewable electricity and 100% carbon-neutral gas, which would make its failure around the time of the crucial COP26 climate summit in Glasgow a more acute headache for the government.
Its demise would also render the shareholdings of executives and their venture capital backers largely worthless.
The latest developments in Bulb’s rescue efforts pave the way for the inaugural use of a resolution process called the Special Administration Regime (SAR), which would guarantee funding for Bulb from the Treasury while administrators seek a restructuring deal, buyer, or transfer of the customer base.
The demise of Bulb would come close to matching the size of the total customer bases of the 14 energy companies which have ceased trading since the beginning of August.
The largest of those, Avro Energy, had about 580,000 customers.
If the search for a buyer does prove unsuccessful, the Department for Business, Energy and Industrial Strategy, alongside Ofgem, would initially consider whether Bulb can be dealt with through the watchdog’s Supplier of Last Resort (SOLR) process.
Under that, a company’s operating licence is removed and bids are sought from other industry players for its customer base, with losses incurred by the acquirers of those customers are then recouped through an industry levy.
Bulb is, however, regarded by most observers as too large for any single supplier to take on through the SOLR system, meaning that invoking the SAR is now viewed as probable by industry executives.
Under the SAR, the administrator has a legal duty to consider the interest of customers, unlike a conventional insolvency process where the primary duty is to creditors.
Sky News revealed last month that Ofgem had lined up Teneo Restructuring, an advisory firm, to be on standby for the collapse of a large energy company.
In a statement on its website about SAR, Ofgem said a memorandum of understanding had been drawn up between itself, the Treasury, and BEIS, adding: “Provisions for this administration scheme for energy suppliers were included in the 2011 Energy Act.
“It has never been used before because a large energy supplier has never been insolvent.”
A government spokesman said on Friday: “Ofgem – as the expert regulator – is monitoring the situation across the energy market for the continued impacts on high worldwide wholesale gas prices.
“We have put in place the powers and robust processes to ensure customers do not experience any disruption to their energy supply and that costs are minimised if a supplier should exit the market.”
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Energy supplier crisis must never happen again – British Gas boss
The regulator added: “There has been an unprecedented increase in global gas prices which is putting financial pressure on suppliers.
“We know this is a worrying time for many people and our number one priority is protecting customers.
“In the event a supplier fails, Ofgem and government have robust processes in place to ensure customers’ electricity and gas supply continue and domestic customers’ credit balances are protected.”
Many of Bulb’s customers could face higher bills because wholesale prices have soared in recent months, although they have begun to fall again.
In total, around 2 million households have seen their supplier cease trading since the summer, sparking demands from some executives for a removal of the industry price cap or a bailout fund to help with the rescue of smaller suppliers.
Kwasi Kwarteng, the business secretary, has rejected both demands.
On Friday, Ofgem said it would consult on changes to the price cap because the ongoing industry crisis had “changed the perception of risk and uncertainty in this market”.
The collapse of one of the biggest challengers to the big players – the largest of which are Centrica’s British Gas, E.ON Next, EDF Energy, Scottish Power and Ovo Energy, which acquired SSE’s retail business – would be a blow to hopes of a more varied and competitive market.
Octopus Energy, which like Bulb supplies 100% renewable energy, has established itself as an independent, well-funded challenger and now boasts 2.5 million customers across more than 4 million accounts.
A professional footballer has been jailed for causing the death of a cyclist in a car crash.
Mansfield Town forward Lucas Akins crashed into Adrian Daniel in his Mercedes G350 in Huddersfield on 17 March 2022, while taking his daughter to a piano lesson.
Leeds Crown Court heard that Mr Daniel, 33, suffered catastrophic head injuries and died 10 days later.
Akins, 36, played in Mansfield’s 0-0 draw with Wigan on 4 March, hours after pleading guilty at Leeds Crown Court to death by careless or inconsiderate driving.
The footballer has continued to play for Mansfield since the incident.
Judge Alex Menary said on Thursday that he had considered imposing a suspended sentence, but had concluded that only an immediate sentence of 14 months’ imprisonment was appropriate.
Mansfield Town’s Akins. Pic: George Wass/PPAUK/Shutterstock
A spokesperson for Mansfield Town FC said it “acknowledges” the court’s decision and offered the club’s “sincere and deepest condolences to the family of Adrian Daniel at this difficult time”.
“The club is considering its position with regards to Lucas and will be making no further comment at this stage,” the spokesperson added.
‘Like hell’
Prosecuting, Carmel Pearson said it was a “difficult junction to emerge from” but that the defendant “did not stop at the give-way sign”.
Savanna Daniel, Mr Daniel’s wife, told the court it had been “like hell and a nightmare [she is] not waking up from”.
“There was no reason for Adrian to be killed that way,” she said, adding it was “too simple a collision to have taken a life”.
Adrian Daniel. Pic: West Yorkshire Police/PA
Mrs Daniel said she did not want Akins’s children growing up without their father as she did not want “any more lives to be destroyed from this”, but she criticised the defendant for failing to plead guilty at an earlier stage.
Tim Pole, representing Akins, said he was “fundamentally a decent, honest and hard-working individual”.
“I want to publicly apologise on his behalf,” he said.
Mr Pole added that Akins understood Mrs Daniel’s “frustration and anger” over the time it took him to plead guilty.
Handing down his sentence, the judge accepted that Akins’s remorse was genuine but by not admitting to the offence at an earlier stage, he had prolonged Mrs Daniel’s “heartache and grief”.
After the sentencing, Mrs Daniel said “three years of hell” had come to a close, in a statement via West Yorkshire Police.
She said Akins had made a “farce” of the justice system and that his failure to plead guilty sooner “makes a mockery of any remorse that Akins offers for his actions”.
Akins, who has played for Mansfield Town since 2022 and was previously with clubs including Huddersfield Town, Tranmere Rovers and Burton Albion, was also suspended from driving for 12 months.
Much of the UK will bask in warm, sunny conditions at the start of next week, with inland temperatures up to 10C higher than average, but it’s a mixed picture before then.
The first half of spring brought warmth and sunshine for many, but the last 10 days have been more changeable.
Some areas of Ireland, Northern Ireland, southwest Wales, and southwest England have seen much-needed rainfall, whereas parts of northern Britain have observed very little.
See the latest weather forecast where you are
Warm, sunny conditions, such as those in Harrogate on Thursday, are expected at the start of next week. Pic: PA
Tyne and Wear in northeast England has recorded just 7% of its average April rainfall, whereas Cornwall in the southwest of the country has already seen 156%.
And the Milford Haven rain gauge in Wales has seen over twice its average April rainfall.
There’ll be more rain over the next few days, mainly in the West, but it looks like high pressure will settle things down from Sunday.
Temperatures will rise too, becoming widely above average on Monday and Tuesday.
Highs of 22C (72F) to 24C (75F) can be expected.
The highest temperature of the year so far is 24C (75F), seen at Northolt in northwest London on Saturday 12 April.
The settled conditions will bring plenty of sunshine, with UV levels expected to be around moderate.
Tree pollen levels will be high in the South, low to moderate in the North.
What happens from next Wednesday onwards is unclear.
A thundery breakdown is possible from the South, or wet and windy conditions may move in from the North West.
Other computer models suggest high pressure will hold on, with the fine weather continuing and potentially higher temperatures.
The last time that 25C (77C) was reached in April was during the COVID-19 lockdown in 2020.
The highest temperature ever recorded in April was 29.4C (85F), seen at Camden Square in London on 16 April 1949.
All this means that it will be quite warm for the London Marathon, which will take place this Sunday.
Temperatures will be around 11-12C (52-54F) at the start, potentially peaking at a warm 22C (70F).
That’s a little off the highest temperature ever recorded for the race, which stands at 24.2C (76F) seen at St James’s Park in 2018.
But it will be a lot higher than the 12.6C (55F) seen last year.
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It’ll be dry for runners and spectators, with sunny spells and light winds.
Competitors in the Manchester Marathon on Sunday will face similar conditions to London’s runners; it should be dry with sunny spells. The temperature first thing will be around 9C (48F), but it’ll warm up with a high of about 19C (66F).
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