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Riding the energy storm

Oaklin Partner, Barry Hahn, assesses how the wobbling energy industry will fare in 2019 and shares his recommendations for building dynamic, profitable businesses.

"Following a decade of choice and exoticism, it’s bad news for consumers that so many energy companies are facing significant financial distresss." 

“I’m in the middle of a chain reaction” – a famous line from Diana Ross’ 1985 hit song – is an apt chorus for the energy industry right now.

In 2018, eight energy suppliers including Spark Energy and Extra Energy ceased trading. In early 2019, another two suppliers – Economy Energy and Our Power – have already gone bust, leaving 270,000 customers with an unexpected New Year’s headache.
Ofgem’s environmental policy funds, including its Renewables Obligation buy-out fund, are estimated to be £59m short because smaller companies can’t afford to pay their liabilities. Company debt is growing. And Ofgem itself is under more scrutiny than ever due to its liberal distribution of licences in the early 2010s.

All of this means that the stage is set for an extremely volatile 12 months in the
energy sector.

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Author: Barry Hahn, Partner