London Daily

Focus on the big picture.
Tuesday, Sep 16, 2025

UK energy suppliers to face new stress tests after dozens collapse

UK energy suppliers to face new stress tests after dozens collapse

Ofgem will set improvement plan for firms showing signs of financial weakness as market prices soar
UK energy suppliers will face new financial stress tests from January as part of a series of plans from the industry regulator to boost the sector’s resilience after rocketing market prices for gas and electricity caused dozens to collapse.

Ofgem will test providers against a range of scenarios and set an improvement plan for companies showing signs of financial weakness that could put their customers at risk.

The regulator also plans to toughen existing financial rules for suppliers and introduce new conditions by the spring, which could include checks on energy company bosses.

In some cases, Ofgem may bar a provider from taking on new accounts before reaching certain milestones, such as 50,000 and 200,000 customers, until it is satisfied that they are financially resilient.

The planned regulation shake-up comes as Ofgem faces deepening criticism over the collapse of 26 energy suppliers in the last four months, which has left almost 4 million customers in need of a new supplier.

The cost of managing the fallout of the UK’s energy market crisis, including the collapse of Bulb Energy, which had 1.7m customers, is expected to reach highs of almost £3.2bn – or £120 a household – on top of the hit to domestic bills from record high energy market prices.

Citizens Advice has laid the blame for the spiralling cost of managing the crisis on Ofgem for failing to take action against rule-breaking suppliers for almost 10 years despite mounting concerns over the energy market.

The chief executive of trade body Energy UK, Emma Pinchbeck, added that the industry “has long been calling for a more sustainable regulatory and policy environment– not only to avoid situations like the present one, but because suppliers need to drive the innovation in products and services to help customers get the best of the green energy transition”.

Households have faced one of the steepest energy bill increases on record this winter because of a global gas crisis, with market prices hitting fresh highs across Europe this week. UK gas prices reached a record closing price of 322.5 pence a therm on Tuesday, according to data from market price experts at ICIS, surpassing the previous high of just over 298p/therm set in early October this year.

Jonathan Brearley, the chief executive of Ofgem, said the regulator has worked hard to protect consumers as gas prices have risen by more than 500% in under a year but has admitted that regulation would need to “go much further”.

He said: “I want to see more checks on staff in significant roles, and better use of data to help us regulate. We need a regime that can enable a sustainable market, to promote our transition to net zero.

Richard Neudegg, the head of the regulation price comparison site Uswitch, said introducing financial stress testing after 26 energy providers have gone bust “feels like the very definition of shutting the stable door after the horses have bolted”.

“While necessary for the future, these proposals are clearly too late to help the current crisis,” he said. “Ofgem’s priority must now be to build a resilient market that can stand strong in the face of any future shocks”.

The regulator’s new rules will be finalised in the spring, and there remains uncertainty over how often suppliers will face stress tests or whether they would be carried out by the regulator or undertaken by the suppliers themselves.

Ofgem has also put forward plans to adjust how the price cap is calculated from next winter, so that it can rise more quickly. An industry consultation has proposed that from next October the price cap could change every three months rather than twice a year. Another option could be a “circuit breaker” clause that allows Ofgem to change the price cap in the event that costs suddenly deviate from their calculations by a significant percentage.

This would help energy suppliers to cover their costs and avoid going bust in the face of soaring market prices, which are not yet reflected by the price cap. The regulator is also considering some short-term interventions to help stabilise the market.
Newsletter

Related Articles

0:00
0:00
Close
U.S. and Britain Poised to Finalize Over $10 Billion in High-Tech, Nuclear and Defense Deals During Trump State Visit
China Finds Nvidia Violated Antitrust Laws in Mellanox Deal, Deepens Trade Tensions with US
US Air Force Begins Modifications on Qatar-Donated Jet Amid Plans to Use It as Air Force One
Pope Leo Warns of Societal Crisis Over Mega-CEO Pay, Citing Tesla’s Proposed Trillion-Dollar Package
Poland Green-Lights NATO Deployment in Response to Major Russian Drone Incursion
Elon Musk Retakes Lead as World’s Richest After Brief Ellison Surge
U.S. and China Agree on Framework to Shift TikTok to American Ownership
London Daily Podcast: London Massive Pro Democracy Rally, Musk Support, UK Economic Data and Premier League Results Mark Eventful Weekend
This Week in AI: Meta’s Superintelligence Push, xAI’s Ten Billion-Dollar Raise, Genesis AI’s Robotics Ambitions, Microsoft Restructuring, Amazon’s Million-Robot Milestone, and Google’s AlphaGenome Update
Le Pen Tightens the Pressure on Macron as France Edges Toward Political Breakdown
Musk calls for new UK government at huge pro-democracy rally in London, but Britons have been brainwashed to obey instead of fighting for their human rights
Elon Musk responds to post calling for the murder of Erika Kirk, widow of Charlie Kirk: 'Either we fight back or they will kill us'
Czech Republic signs €1.34 billion contract for Leopard 2A8 main battle tanks with delivery from 2028
USA: Office Depot Employees Refused to Print Poster in Memory of Charlie Kirk – and Were Fired
Proposed U.S. Bill Would Allow Civil Suits Against Judges Who Release Repeat Violent Offenders
Penske Media Sues Google Over “AI Overviews,” Claiming It Uses Journalism Without Consent and Destroys Traffic
Indian Student Engineers Propose “Project REBIRTH” to Protect Aircraft from Crashes Using AI, Airbags and Smart Materials
French Debt Downgrade Piles Pressure on Macron’s New Prime Minister
US and UK Near Tech, Nuclear and Whisky Deals Ahead of Trump Trip
One in Three Europeans Now Uses TikTok, According to the Chinese Tech Giant
Could AI Nursing Robots Help Healthcare Staffing Shortages?
NATO Deploys ‘Eastern Sentry’ After Russian Drones Violate Polish Airspace
Anesthesiologist Left Operation Mid-Surgery to Have Sex with Nurse
Tens of Thousands of Young Chinese Get Up Every Morning and Go to Work Where They Do Nothing
The New Life of Novak Djokovic
The German Owner of Politico Mathias Döpfner Eyes Further U.S. Media Expansion After Axel Springer Restructuring
Suspect Arrested: Utah Man in Custody for Charlie Kirk’s Fatal Shooting
In a politically motivated trial: Bolsonaro Sentenced to 27 Years for Plotting Coup After 2022 Defeat
German police raid AfD lawmaker’s offices in inquiry over Chinese payments
Turkish authorities seize leading broadcaster amid fraud and tax investigation
Volkswagen launches aggressive strategy to fend off Chinese challenge in Europe’s EV market
ChatGPT CEO signals policy to alert authorities over suicidal youth after teen’s death
The British legal mafia hit back: Banksy mural of judge beating protester is scrubbed from London court
Surpassing Musk: Larry Ellison becomes the richest man in the world
Embarrassment for Starmer: He fired the ambassador photographed on Epstein’s 'pedophile island'
Manhunt after 'skilled sniper' shot Charlie Kirk. Footage: Suspect running on rooftop during panic
Effective Protest Results: Nepal’s Prime Minister Resigns as Youth-Led Unrest Shakes the Nation
Qatari prime minister says Netanyahu ‘killed any hope’ for Israeli hostages
King Charles and Prince Harry Share First In-Person Moment in 19 Months
Starmer Establishes Economic ‘Budget Board’ to Centralise Policy and Rebuild Business Trust
France Erupts in Mass ‘Block Everything’ Protests on New PM’s First Day
Poland Shoots Down Russian Drones in Airspace Violation During Ukraine Attack
Brazilian police say ex-President Bolsonaro had planned to flee to Argentina seeking asylum
Trinidad Leader Applauds U.S. Naval Strike and Advocates Forceful Action Against Traffickers
Kim Jong Un Oversees Final Test of New High-Thrust Solid-Fuel Rocket Engine
Apple Introduces Ultra-Thin iPhone Air, Enhanced 17 Series and New Health-Focused Wearables
Macron Appoints Sébastien Lecornu as Prime Minister Amid Budget Crisis and Political Turmoil
Supreme Court temporarily allows Trump to pause billions in foreign aid
Charlie Sheen says his father, Martin Sheen, turned him in to the police: 'The greatest betrayal possible'
Vatican hosts first Catholic LGBTQ pilgrimage
×