Energy crisis

ScottishPower exits industrial & commercial market

ScottishPower: challenges

ScottishPower, owned by Spanish energy company Iberdrola will stop selling energy to industrial and commercial (I&C) customers in the UK, it has announced.

It said the energy sector is facing “unprecedented challenges” and has taken the decision to exit the I&C market.

“There is no impact on existing business customers, we will continue to honour all contracts and no employees are affected by this decision,” the company said.

The power market supplying businesses has been largely shielded from the succession of failures among UK energy companies.

However, it is now facing the possible collapse of Gazprom Marketing & Trading Retail, which would cause significant disruption as it supplies about a fifth of British firms.

The UK government is preparing to step in and temporarily run the subsidiary amid a search for a buyer and speculation that UK management have made a bid to buy it out, as sanctions against its parent company threaten to make it insolvent.

Centrica, owner of Britain’s largest energy suppler British Gas, said earlier this month it would exit its gas supply agreements with Russian counterparts, principally Gazprom Marketing & Trading.

A UK government spokesman said: “We are aware that Gazprom Energy has a large presence in the non-domestic energy retail market. Gazprom’s retail business continues to trade in the UK and customers should exercise their own commercial judgement with regards to energy supply contracts.”

More than 20 household energy suppliers failed last year as they struggled with soaring wholesale prices and a price cap that prevented them passing on costs to customers.

No such protection is in place for business energy buyers but prolonged high wholesale prices mean it is still difficult for costs to be passed on if long-term contracts are in place.

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