London Daily

Focus on the big picture.
Wednesday, Oct 21, 2026

Energy crisis: Fears grow that big supplier Bulb could collapse next week as government accelerates contingency plans

Energy crisis: Fears grow that big supplier Bulb could collapse next week as government accelerates contingency plans

Officials and regulators are on standby for Bulb, which has 1.7 million customers to collapse as soon as next week even as talks with potential rescuers continue.

The government is accelerating contingency plans for the collapse of Bulb, Britain's seventh-biggest domestic energy supplier - a demise that would mark by far the biggest insolvency of the crisis engulfing the sector.

Sky News has learnt that ministers and officials, along with the industry regulator Ofgem, believe that Bulb - which has around 1.7 million household customers - could collapse as soon as next week, amid diminishing expectations of a rescue deal.

Industry sources said on Friday that talks with a small number of potential buyers were ongoing, but that others had pulled out in recent days.

A solvent rescue remains a possibility, they said, but added that it was highly unlikely that Bulb could survive through November without new funding.


Ovo Energy, Octopus Energy, and Shell Energy Retail are among the rival gas and electricity groups which have had access to Bulb's financial data in recent weeks.

An executive at one of the companies which had explored a takeover of Bulb said it had liabilities of approximately £600m, making a solvent takeover of the company hard to envisage given the backdrop of wholesale price volatility.

A Bulb spokesperson said on Friday: "Our discussions with multiple parties to secure additional funding continue to make good progress and we're encouraged by the drop in wholesale energy prices.

"We expect the government to monitor wholesale prices and their effect on the whole industry, but ministers and Ofgem have been clear we must emerge from the energy crisis with a competitive and innovative market, rather than a return to the oligopoly of the past."

Lazard, the investment bank, has been engaged in the search for new funding, while AlixPartners, an advisory firm, has been working with Bulb on short-term measures to strengthen its balance sheet.

If Bulb does collapse, it would place at risk the jobs of roughly 1,000 people who work for the company, which was launched in 2015 by Amit Gudka and Hayden Wood, and has accumulated a 6% share of the market.

It supplies 100% renewable electricity and 100% carbon-neutral gas, which would make its failure around the time of the crucial COP26 climate summit in Glasgow a more acute headache for the government.

Its demise would also render the shareholdings of executives and their venture capital backers largely worthless.

The latest developments in Bulb's rescue efforts pave the way for the inaugural use of a resolution process called the Special Administration Regime (SAR), which would guarantee funding for Bulb from the Treasury while administrators seek a restructuring deal, buyer, or transfer of the customer base.

The demise of Bulb would come close to matching the size of the total customer bases of the 14 energy companies which have ceased trading since the beginning of August.

The largest of those, Avro Energy, had about 580,000 customers.

If the search for a buyer does prove unsuccessful, the Department for Business, Energy and Industrial Strategy, alongside Ofgem, would initially consider whether Bulb can be dealt with through the watchdog's Supplier of Last Resort (SOLR) process.

Under that, a company's operating licence is removed and bids are sought from other industry players for its customer base, with losses incurred by the acquirers of those customers are then recouped through an industry levy.

Bulb is, however, regarded by most observers as too large for any single supplier to take on through the SOLR system, meaning that invoking the SAR is now viewed as probable by industry executives.

Under the SAR, the administrator has a legal duty to consider the interest of customers, unlike a conventional insolvency process where the primary duty is to creditors.

Sky News revealed last month that Ofgem had lined up Teneo Restructuring, an advisory firm, to be on standby for the collapse of a large energy company.

In a statement on its website about SAR, Ofgem said a memorandum of understanding had been drawn up between itself, the Treasury, and BEIS, adding: "Provisions for this administration scheme for energy suppliers were included in the 2011 Energy Act.

"It has never been used before because a large energy supplier has never been insolvent."

A government spokesman said on Friday: "Ofgem - as the expert regulator - is monitoring the situation across the energy market for the continued impacts on high worldwide wholesale gas prices.

"We have put in place the powers and robust processes to ensure customers do not experience any disruption to their energy supply and that costs are minimised if a supplier should exit the market."

The regulator added: "There has been an unprecedented increase in global gas prices which is putting financial pressure on suppliers.

"We know this is a worrying time for many people and our number one priority is protecting customers.

"In the event a supplier fails, Ofgem and government have robust processes in place to ensure customers' electricity and gas supply continue and domestic customers' credit balances are protected."

Many of Bulb's customers could face higher bills because wholesale prices have soared in recent months, although they have begun to fall again.

In total, about two million households have seen their supplier cease trading since the summer, sparking demands from some executives for a removal of the industry price cap or a bailout fund to help with the rescue of smaller suppliers.

Kwasi Kwarteng, the business secretary, has rejected both demands.

On Friday, Ofgem said it would consult on changes to the price cap because the ongoing industry crisis had "changed the perception of risk and uncertainty in this market".

The collapse of one of the biggest challengers to the big players - the largest of which are Centrica's British Gas, E.ON Next, EDF Energy, Scottish Power and Ovo Energy, which acquired SSE's retail business - would be a blow to hopes of a more varied and competitive market.

Octopus Energy, which like Bulb supplies 100% renewable energy, has established itself as an independent, well-funded challenger and now boasts 2.5 million customers across more than four million accounts.

Newsletter

Related Articles

0:00
0:00
Close
Housebuilding Across Scotland Plummets to Eleven-Year Low Despite Government Pledges to Tackle National Housing Emergency
Greggs Announces Factory Closures Across Northern England and Scotland Affecting Seven Hundred Forty Jobs
United Kingdom and Singapore Conclude Eleventh Financial Dialogue in Singapore to Deepen Cooperation on Digital Finance and Capital Markets
Energy Security and Net Zero Committee Urges Government to Shift Policy Costs to Gas Bills and Tap Windfall Profits to Lower Consumer Prices
British Broadcasting Corporation Announces Major Cost-Cutting Overhaul to Close Linear Broadcast Services for Television Channels BBC Three and BBC Scotland Alongside Digital Radio Station BBC Radio Four Extra
London Capital Markets Face Renewed Scrutiny After High-Profile Offerings Underperform Post-Listing
Green Party Wins Historic First Westminster Parliamentary By-Election in Gorton and Denton
Environment Secretary Emma Reynolds Unveils Sweeping Regulatory Overhaul for English Water Industry
United Kingdom Health Security Agency Confirms Thirty-Four Cases in Kent Meningitis Outbreak
Ministry of Defence Prepares Heat Pump Subsidy Cuts to Fund Urgent Military Modernization
British and European Union Officials Schedule Long-Awaited Bilateral Leaders Summit for November Twentieth
Bank of England Governor Andrew Bailey Urges Strict Fiscal Credibility to Protect British Bond Markets
United Kingdom Inflation Rises to Three Point One Percent Driven by Escalating Fuel Costs
Profit Warnings Among London-Listed Companies Reach Two-Year High Amid Global Energy Shocks
Chancellor John Healey Signals Targeted Tax Changes on Banks and London Corporate Offices Ahead of Budget
British Government Reallocates Twenty-Five Per Cent of International Climate Finance to Global Biodiversity Projects
Initial British Carbon Border Taxes Set to Undercut Parallel European Union Tariffs on Industrial Imports
Whitehall Prepares National Zero-Interest Loan Initiative to Accelerate Domestic Heat Pump and Solar Adoption
European Union Offers British Automakers Access to Hybrid Vehicle Trade Protections Subject to Strict Regulatory Alignment
British Probation Officers Threaten Widespread Industrial Action After Rejecting Five Per Cent Government Pay Offer
Microsoft Abandons Major British Artificial Intelligence Data Centre Citing Severe National Grid Power Constraints
United Kingdom Inflation Accelerates to Three Point Four Per Cent Ahead of Chancellor John Healey's Inaugural Autumn Budget
Surging Cloned Number Plates Severely Complicate Traffic Enforcement and Police Investigations
Mounting Opposition Challenges Planned Rollout of Autonomous Taxis Across London
Influential Think Tank Urges Rejoining European Union to Navigate Geopolitical Crises
Government Review Recommends Slashing Benefits to Fund Youth Employment Initiatives
Senior Minister Shabana Mahmood Seeks New Law Enforcement Pact With European Union
Airbus Executive Warns Britain Risks Losing Crucial Role in European Space Industry
Exorbitant Electricity Costs Push British Steelmakers to Worst Competitive Position in Three Years
British Food and Beverage Exports to European Union Collapse by Over a Third Since Brexit
Up to Twenty English Maternity Units Face Impending Closure Due to Safety and Staffing Crises
Government Declares Severe Drought Across Southern England Following Record Dry Spell
Corporate Profit Warnings Reach Two-Year High Amid Middle East Conflict and Rising Costs
International Monetary Fund Warns Chancellor John Healey Against Proposed Bank Tax Raid
Northern Ireland Secures Favorable Agricultural Export Agreement with European Union
Scottish Government Approves Major Offshore Floating Wind Farm Near Aberdeenshire
High Speed Two Rail Project Faces Three Billion Pound Cost Escalation on Initial Phase
National Health Service Warns of Winter Capacity Crisis Across English Hospitals
Tata Steel Confirms Two Thousand Job Cuts at Port Talbot to Fund Green Transition
Global Microchip Developer Announces Three Billion Pound Semiconductor Plant in Cambridge
United Kingdom Artificial Intelligence Safety Institute Proposes Mandatory Licensing for Generative Models
United Kingdom Commits Additional Long-Range Weapons and Air Defenses to Ukraine
British Chancellor Overhauls Infrastructure Financing to Bypass Borrowing Constraints
Bank of England Holds Benchmark Interest Rate at Four Point Five Percent
First Minister Rhun ap Iorwerth Confirms Constitutional Discussions Over Welsh Independence During Initial Bilateral Call with Prime Minister
Labour Party Instructs Local Council Groups to Sever Power-Sharing Accords with Green Party Over New Controversial Policy Positions
Institute for Fiscal Studies Warns of Thirty-Five Billion Pound Fiscal Gap Ahead of Chancellor John Healey Upcoming Autumn Budget
House of Lords Backs Landmark Legislative Amendment to Decriminalize Abortion Across England and Wales
United Kingdom Defence Secretary Wes Streeting Travels to Pentagon for High-Level Strategic Talks Amid Escalating Tensions Over Ukraine and United States Policy Shifts
Bank of England and International Monetary Fund Officials Issue Urgent Warnings Regarding Potential Artificial Intelligence Financial Market Shocks
×