There are less than 6/7 Energy Providers - i.e. The produce gas and or electricity, maintain a supply network in parts of the country and have retail and commercial companies as customers.
The 20 + companies that have gone bust were Energy Invoicers not Energy Companies.
The Energy Invoicers bought gas & electricity in lumps of 30 minutes - prices go up & down by the 30 minute contracts and vary throughout the year.
The flaw in their business plan was that they were handing out contracts to both commercial & retail customers on FIXED contracts for up to 2+ years. If the wholesale price is steady they can make profits, if the wholesale price falls they make megabucks and it the wholesale prices rocket they go out of business.
Handing out fixed price contracts without taking out contracts of supply at fixed prices is foolhardy.
Banks will lend you ££s to buy cars, houses etc for fixed rates for say 5 years HOWEVER the banks have borrowed that money from other banks, finance houses etc at fixed rates and they make a small %age on every deal with little risk to themselves.
Sympathies for those who have or will lose their job. No sympathies for the speculators who thought they could take on the market with a flawed business plan.
The trouble is ALL the money lost will come back on our bills next year and for years after to pay out money lost by the bust companies.
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