“Heating or eating” – stark reality of rising gas prices

Last year, I ‘switched’ my gas and electricity supply to a company called ‘Green Network Energy’ (GNE) – an Italian-based company that was ‘recommended’ to me by one of these price comparison sites. as I was offered a better deal compared to nPower, my provider at the time.

Earlier this year, GNE announced that they had gone into administration, and subsequently OfGEM nominated EDF as my new supplier, to whom my account was transferred. EDF set me up with a ‘special’ tariff for ex-GNE customers, which promised the same rate but only until October 2021, at which point I would be free to switch to another supplier.

As things stand, in late August, having reviewed my options, I decided to stay with EDF and accept a new fixed-rate tariff with them, which will see my bills rise a little, which was of course to be expected as there had been numerous warnings about rising wholesale prices of gas.

Now throughout September, there have been numerous stories regarding the increase in wholesale gas prices. And also there has been a ‘message’ repeated through various media outlets regarding people having to make choices “between heating or eating”.

And then a couple of days ago I saw the following:

Avro Energy collapses along with Green Energy as more suppliers go bust

Two energy suppliers have collapsed today as wholesale gas prices continue to soar.

Green, which entered crisis talks earlier this week, has around 250,000 customers who will now be placed onto a new supplier by Ofgem.

Avro Energy, which has around half a million customers, will also hand off customers to Ofgem who will assign them a new supplier.

It comes just hours after the regulator warned multiple firms will fold in the coming weeks due to an ‘unprecedented’ surge in wholesale prices.

Neil Lawrence, director of Retail at Ofgem, said: “I want to reassure customers of Green Supplier Limited that they do not need to worry.

“Under our safety net we’ll make sure your energy supplies continue. If you have credit on your Avro Energy or Green Supplier Limited account this is protected and you will not lose the money that is owed to you.”

A statement on the Avro website says: “Avro Energy is ceasing to trade. Ofgem, the energy regulator, is appointing a new supplier for its customers.

“Customers need not worry, their supplies are secure and domestic credit balances are protected.”

Energy experts have called it a “double blow” for the industry. Justina Miltienyte, energy policy expert at Uswitch.com, said: “This is a double blow for the energy industry and will cause further worry for consumers.

“Avro and Green’s simultaneous exits from the market come after People’s Energy and Utility Point ceased trading last week. Nine energy suppliers have been forced out this year so far and it’s likely that more may follow.

“Soaring wholesale prices are making conditions difficult for all suppliers, but challenger brands in particular are struggling to make ends meet.

“Affected customers will be moved onto new suppliers appointed by Ofgem, but for now they should sit tight and wait until their account is transferred to the new provider before trying to switch.

“Customers can be reassured that their energy supply will continue as normal and any credit balances they have built up will be protected.

“We recommend that Avro and Green customers make a note of their meter readings now, and again when contacted by their new supplier, to ensure bills are accurate.

“Once the new supplier is appointed, they will be in touch to provide more information.”

From: https://www.birminghammail.co.uk/news/uk-news/avro-energy-collapses-along-green-21645839

I’m all for ‘free-market capitalism’ (provided its done fairly of course) but the ‘energy market’ has always been an odd one for me. Anyone was able to set themselves up as an ‘energy supplier’, but all they were doing really was ‘reselling’ what was available, and not actually producing any energy themselves. However, if I was looking to switch energy provider, I wouldn’t feel confident switching to some ‘smaller supplier’ right now.

This whole system of consumers having some ‘choice’ when it came to selecting an energy supplier, and having a (sometimes bewildering) array of fixed-term tariff rates, is great for consumers, and great for those suppliers, especially if wholesale prices came down.

But not so good if wholesale prices increased like they have lately. The ‘big’ energy suppliers, who either produce gas/electric themselves, or have the backing of ‘wealthy hedge-funds’, are better equipped to ride out these situations, and can just sit back and wait for their ‘competition’ to go to the wall, knowing full well that Ofgem will end up handing them the customers of these failed companies.

Is this all being contrived to ‘kill off’ the energy free-market? Or is it an example of an industry where ‘free-market enterprise’ just doesn’t work?

But going back to the “heating or eating” message. Yes, it is looking like consumers are going to have to make some difficult choices, but this kind of ‘alarmist message’ doesn’t really help matters, and all it does is promote yet more ‘fear’ among the public.

Yes, for some people, household energy bills are going to rise. However, if you are already on some fixed-rate tariff from your supplier, then the chances are that you’re not going to be affected, at least not until your current tariff comes up for renewal, whenever that may be. Unless in the meantime, your current supplier goes bust…

Sort out your priorities

It is inevitable that energy prices are going to rise, and you will end up paying more to heat your home this winter.

If you’re already struggling to make ends meet, its probably a good time to take stock of your situation, and look to make household cost savings wherever you can.

Work out what your priorities are. What is more important to you? Putting food on your table and keeping your household warm during the winter? Or your Sky Movies subscription?

There are already things you can do to reduce your energy consumption during the winter. When it gets cold, instead of sitting around in t-shirts and shorts, put on a jumper. Turn your heating down, or adjust your room temperature thermostat. You’re not going to ‘freeze to death’, you just need to adapt slightly.

Paying for takeaway meals might be ‘convenient’, but you could save a bit of money if you spent less on McDonalds and KFC, and shopped more ‘frugally’ for groceries, and prepared meals at home instead. As well as ‘big-name’ supermarkets such as Asda, Tesco or Sainsburys, have a look at ranges from offer from the likes of Iceland, Farm Foods or Lidil and Aldi. You’d be surprised how much you could save simply by shopping elsewhere, and you don’t need to be a ‘gourmet chef’ or spend hours preparing meals for you and your family.

Do you really need that SKY TV subscription? Or iPads for your children? Could you do without? What is more important to you?

Those are the questions that some people need to be asking.

But as usual, I feel this will end up being a ‘blame game’, where individuals’ problems will end up being “someone else’s fault”.

No-one should expect everything to be handed to them on a plate. Learn to make do with what you have, and be prepared to ‘do without’ until you can afford it.

In my journey through life, I have learned about having to make sacrifices, doing wthout, and being grateful for what I do have.

It’s time that others did the same.

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