Independent supplier, GB Energy has ceased trading, stating the recent rise in energy prices as the cause behind the firm's collapse.
Independent energy supplier, GB Energy has ceased trading due to the recent hike in energy prices, leaving behind 160,000 customers. In a statement, GB Energy claims that as a "small supplier" business had "become untenable" but has given assurances that its customer's energy supply would be unaffected.
Ofgem will appoint a new supplier to the affected customers and have made clear that any outstanding credit balances will be protected. Customers are advised to take a meter reading and wait for contact from their appointed supplier.
Managing Director of GB Energy Supply, Luke Watson said in a letter to customers that "Due to swift and significant increases in energy prices over recent months and, as a small supplier our inability to forward buy energy to allow us to access the best possible wholesale prices, means that the position of the business has become untenable."
GB Energy's closure sees them become the first independent supplier to cease trading since prices have increased but there are fears that more small energy suppliers could be at risk. Energy prices have been low for the past two years but have shown an increase in recent months with the depreciation of the Pound and a recovery in oil prices contributing factors.
Tight energy systems across Europe have also provided strong support to the market with the unplanned shutdowns of several nuclear reactors in France causing concerns in regards to supply levels over the winter period.
Doug Stewart, chief executive of the independent customer-owned supplier, Green Energy UK said: "The closure of GB Energy is as a result of loss-making tariffs coming home to roost, I fear it is the first of many if we have a harsh winter."
The 'Big Six' energy suppliers have benefitted from this rise in energy costs as they have the capability to generate their own energy and also have the financial capability to reduce the risk of price volatility by hedging.