UK energy supplier Rebel Energy has ceased trading with its CEO citing a “perfect storm of rising wholesale costs”.
Rebel Energy, which supplies around 80,000 domestic customers and 10,000 non-domestic customers, will cease operations. Ofgem is set to appoint a new supplier and protect these customers currently in limbo. Ofgem’s advice is not to switch but to wait until a new supplier has been selected.
Under the Supplier of Last Resort (SoLR) safety net, customers will continue to receive their energy supply, and any funds they have paid into their accounts, including existing credit balances, will be safeguarded. Additionally, domestic customers will benefit from the energy price cap when switching to a new supplier.
Dan Bates, CEO of Rebel Energy, took to LinkedIn to explain that the company had been battling a “perfect storm of rising wholesale costs during January and February together with the pressure of the cost-of-living crisis on our customers”.
Bates added that Ofgem recently placed a ‘provisional order’ on the business, which triggered a sequence of events. Last week, the company identified that it needed to attract significant additional investment to address an unexpected forecast cash shortfall in April. Bates confirmed it had not been able to raise the required capital.
Rebel Energy’s closure comes around three years after the start of the energy crisis, which saw 29 energy suppliers shutter at the end of 2021, most of which were placed into the SoLR mechanism. This was due to high wholesale prices and the squeezes of the Default Tariff Price Cap.
Perhaps the most notable closure from this time was Bulb Energy, which had around 1.5 million customers when it entered special administration in November 2021 after failing to find new funding opportunities and announcing insolvency amid high power prices. Since then, Octopus Energy has acquired the company, helping cement it as GB’s largest electricity supplier.
Tim Jarvis, director general for markets at Ofgem, said that although the regulator has strengthened the rules so that suppliers are “more resilient to shocks and less likely to fail”, the market is still competitive and thus failings can occur.
“We have worked hard to improve the financial resilience of suppliers in recent years, implementing a series of rules to make sure they can weather unexpected shocks. But like any competitive market, some companies will still fail from time to time, and our priority is making sure consumers are protected if that happens,” Jarvis said.
“We are working quickly to appoint new suppliers for all impacted customers. We’d advise customers not to try to switch suppliers in the meantime, and a new supplier will be in touch in the coming weeks with further information.”
Support for both domestic and non-domestic customers of Rebel Energy can be found on the Ofgem website.
