Energy Suppliers to be stress tested by Ofgem, after string of collapses.

by | Dec 17, 2021

Energy Suppliers to be stress tested by Ofgem, after string of collapses.

The financial resilience of suppliers is due to be tested by Ofgem, test will ensure a review of Ofgem’s price cap policy after a string of vulnerable suppliers cease trading and declare bankruptcy due to a 500% jump in gas prices. Following further concern that a Russian invasion of Ukraine would hinder energy supplies.


Ofgem’s position as the Uk’s energy regulator has come under fire after more than 20 British suppliers were left with no option but to cease trading due to record gas prices which they were unable to pass on to customers due to the energy watch dogs price cap.

To protect suppliers and customers in the future Ofgem is proposing a string of tests and scenarios to measure their resilience. Ofgem Chief Executive Jonathan Brearley stated, “Today I’m setting out clear action so that we have robust stress testing for suppliers so they can’t pass inappropriate risk to consumers”,

Ofgem also added that management within suppliers will need to implement self-assessments. Following the extension of the assessment period of new supplier licenses to nine months.  Bearley critiqued Ofgem’s proposed standard variable rate (SVR), had not been “sufficiently flexible” to manage “shocks” within the market.

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