Energy firms in UK seeking govt assistance
Britain's biggest energy companies have asked the government for support to help cover the cost of taking on customers from firms that have gone bust due to soaring wholesale gas prices, sources in the companies said, as fears of a food supply crunch rise.
Wholesale gas prices have soared in recent months as economies reopen from COVID-19 lockdowns and high demand for liquefied natural gas in Asia pushed down supplies to Europe, leading a shortage of carbon dioxide in the food industry.
Some of Britain's meat processors will run out of CO2 – also used to put the fizz in beer, cider and soft drinks – within five days, forcing them to halt production, the head of the industry's lobby group warned.
The rise in prices has already forced four small energy suppliers to cease trading in recent weeks and Business Secretary Kwasi Kwarteng was due to hold more emergency talks with energy company bosses yesterday following a meeting on Saturday.
British ministers are looking at a range of options to help companies such as National Grid, Centrica, EDF as they face soaring prices and a flood of customers from failed suppliers.
Options under consideration include offering state-backed loans, underwriting the debt of suppliers, and the creation of a "bad bank" to house customers who could not be taken on without losing money, the sources in Britain's energy companies said.
Britain's energy regulator, known as Ofgem, will ensure customers gas and electric supply if their energy company goes bust, Kwarteng said.
"We don't want the consumers to have to pay for the situation but equally the companies cannot pay for it all so something has to give," one source said.