How many Energy Suppliers Will Survive?

michaels

Surely almost all the energy companies are likely to become technically insolvent due to bad debt.  I know in theory the cap will then rise to allow recovery but that then just snowballs the problem as higher prices mean even more can't pay.  If 25% don't pay over the winter then those who do pay will each have to pay 33% extra to over the shortfall.

njm123

michaels said:

Surely almost all the energy companies are likely to become technically insolvent due to bad debt.  I know in theory the cap will then rise to allow recovery but that then just snowballs the problem as higher prices mean even more can't pay.  If 25% don't pay over the winter then those who do pay will each have to pay 33% extra to over the shortfall.

If you get non-payment at that level, the systems failed,   you have to put everyone on prepayment plans.

It's unsustainable to have a system where those that don't pay are subsidised by those that do - especially when it hit's a level where even if there are consequences it'll be hard to enforce them due to the volume of offenders.

Vegastare

The other question is who will just walk away from UK - take the loss and cut the ties.  Simply leave the retail sector altogether.

QrizB

Mobtr said:

Mstty said:

All the big well established energy suppliers will survive. 
One reason is below
April 2022 £1971 price cap 2% profit = £39.42 per customer

Oct 2022 £3600 predicted price cap 2% profit £72 per customer

Where did you get this information from or is it just made up?

The profit element of the price cap is published by Ofgem as part of the calculations. It's the pale blue EBIT bar in this chart.

Mstty

Mobtr said:

Mstty said:

All the big well established energy suppliers will survive. 

One reason is below

April 2022 £1971 price cap 2% profit = £39.42 per customer

Oct 2022 £3600 predicted price cap 2% profit £72 per customer

Where did you get this information from or is it just made up?

No I didn't make it up🤣🤣 it's published everywhere but here is one link

https://sse.co.uk/help/energy/gas-electricity-bill-payment/bill-price-breakdown

If you mean the £3600 price cap for October I did state predicted.

Mstty

t0rt0ise said:

Mstty said:

All the big well established energy suppliers will survive. 

One reason is below

April 2022 £1971 price cap 2% profit = £39.42 per customer

Oct 2022 £3600 predicted price cap 2% profit £72 per customer

And think of all the VAT the government is raking in! There's no mention of the extra they've already had when talking about how help is going to be paid for.

I dont thank the 5% vat  has even scratched the surface of the amounts they have handed out so far and about to hand out in October.

[Deleted User]

Mstty said:

t0rt0ise said:

Mstty said:

All the big well established energy suppliers will survive. 

One reason is below

April 2022 £1971 price cap 2% profit = £39.42 per customer

Oct 2022 £3600 predicted price cap 2% profit £72 per customer

And think of all the VAT the government is raking in! There's no mention of the extra they've already had when talking about how help is going to be paid for.

I dont thank the 5% vat  has even scratched the surface of the amounts they have handed out so far and about to hand out in October.

As a Country we are broke as today's financial news reveals:

"Ministers today warned of 'pressure' on the public finances after the government racked up another £4.9billion of borrowing in July.

Despite the tax take rising, higher spending and interest payments pushed the UK's debt mountain closer to £2.4trillion.

Central government spend was up £3.4billion compared to the same month last year to £76.5 billion - driven partly by a £2.3billion increase in debt interest."

Putting energy to one side, Ministers are going to have to find extra money to cover the inflation costs of running schools; Defence; the NHS etc. I am not sure that many actually understand the situation this Country is in. A lot of the early promises made by one PM candidate were based on a forecast that has massively changed for the worse. 

wittynamegoeshere

Section62 said:

The idea of public-sector energy suppliers has been tried, and not worked out very well.

The idea of private-sector energy suppliers has also been tried, and also not worked out very well.

If you dismiss every idea because it once failed at some point in history then you can only conclude that nothing will work.

pochase

The 2% was part of the April cap. As we have not seen the new cap, nobody knows if the 2% will stick, more likely it will go down as a percentage.

brewerdave

[Deleted User] said:

Mstty said:

t0rt0ise said:

Mstty said:

All the big well established energy suppliers will survive. 

One reason is below

April 2022 £1971 price cap 2% profit = £39.42 per customer

Oct 2022 £3600 predicted price cap 2% profit £72 per customer

And think of all the VAT the government is raking in! There's no mention of the extra they've already had when talking about how help is going to be paid for.

I dont thank the 5% vat  has even scratched the surface of the amounts they have handed out so far and about to hand out in October.

As a Country we are broke as today's financial news reveals:

"Ministers today warned of 'pressure' on the public finances after the government racked up another £4.9billion of borrowing in July.

I wish somebody would convince the striking Unions who think that the Government will bail out the public sector employers by shaking Jeremy's magic money tree (or orchard as it would now need to be !!!)