The UK’s energy suppliers need to be more resilient, the boss of Ofgem has said after more than two dozen companies collapsed in the last three months.
Jonathan Brearley also said that high gas prices are likely to remain in place for months.
Suppliers have been collapsing across Great Britain in recent weeks, after the price of gas spiked by as much as five times compared to the start of this year.
“We have a retail sector that needs to become much, much more financially resilient. So we do need a retail sector that is more able to handle shocks like this in the future,” he told lords on the Industry and Regulators Committee.
He added: “Not only is this a very fast and a very quick change in prices. I think this is going to be sustained, potentially.
“I don’t know, I’m afraid nobody knows. There’s huge uncertainty. But we have to plan for these prices being around for the coming months.
“As such, we do need a very, very different way of regulating the retail sector.”
He also said that the regulator will need to reassess the price cap on energy bills. The price cap is currently set so low that energy suppliers are having to pay more for the gas they buy than the amount they can sell it for.
Energy prices have spiked globally due to a series of issues aligning around the world. Increased demand from a reopening economy has been paired with higher demand from China and a summer that was less windy than normal.
Together these have helped push up the price of gas to a level where suppliers simply could not keep going.
The biggest failure was challenger supplier Bulb which served 1.7 million customers. But more than two million other customers have also seen their energy supplier fail.
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