Is Neon Reef Going Bust?
Those who have been in the energy sector for any length of time will be familiar with the phrase ‘neon reef’. This refers to the idea that the costs of providing energy are inflated and that the price cap on energy has been raised again. This is a big issue for many customers as the prices can be difficult to manage. Fortunately, British Gas are looking to step in to help protect their customers.
British Gas will step in to protect customers
Several energy suppliers have been forced into special administration. This is because of high wholesale gas prices and a cold winter. A number of smaller firms have collapsed, including Breeze Energy, Bulb and Pure Planet. Several more companies have been warning of problems.
British Gas will step in to protect customers of Neon Reef Limited, which supplies 30,000 electricity customers. The firm ceased trading last week. Ofgem has appointed British Gas to take on the customers. This is part of Ofgem’s Supplier of Last Resort process. The company will put the customers on a special “deemed” contract, which will last for a set length of time. This will allow customers to switch to a different supplier without any exit fees.
Energy price cap rises again
Almost two years after it was introduced, the Ofgem energy price cap has been updated. Its latest rise is 12-13% from the start of October.
The cap is designed to limit the amount of money energy suppliers can charge for standard tariffs. This is calculated as an average across the UK. It takes into account the cost of wholesale prices in February to July.
It also takes into account the average amount of energy you use. The cap is designed to protect you from sudden wholesale price increases. It is worth noting that the cap also varies by region. It is likely that the price cap will continue to rise over the next year.
The energy price cap is also meant to protect you from the rise in gas prices. Prices are now expected to go up again in April.
Renewable energy sources
Several energy suppliers have gone bust in recent months. There are now over two million households in need of a new supplier.
Neon Reef, a provider of renewable energy to 30,000 households, has closed its doors. Neon Reef was among the firms censured by Ofgem for failing to pay meter readings and Feed-in Tariff scheme contributions.
The company’s name was actually an acronym for Neon Ocean Water Electricity. In 1881, French scientist Jacques-Arsene d’Arsonval proposed that electricity could be generated from ocean water. The technology is based on steam engines with copper wire around a magnet. In theory, electricity can be generated from the ocean’s temperature gradients. In practice, though, it can take a very large investment before the first kilowatt is generated.
Feed-in Tariff payments
Thousands of households have received news that Neon Reef, a renewable energy supplier, is going bust. This is the second time this year that Symbio Energy has been in trouble with Ofgem. This time, the firm failed to pay PS146,238 in Feed-in-Tariff payments. In the first case, the firm received a PS450,000 provisional order from Ofgem, but missed the payment deadline.
Neon Reef ceased trading on 16 November 2021. It was not a newcomer to the energy market, but it supplied 30,000 customers with renewable electricity. Its customers managed their accounts through an app and via an online service.
Neon Reef had a number of provisional orders from Ofgem, and owed PS386,500 to two funds. These payments were meant to be paid over a period of 20 years. But the firm failed to make the payments, and its license was suspended.
Impact on customers
Thousands of customers have been left without a supplier after Neon Reef ceased trading. It is the latest in a string of small energy firms to shut down. In the three months since September, 24 energy firms have gone bust.
The latest to go bust was Neon Reef, which supplied electricity to about 30,000 domestic customers. The company was one of the cheapest suppliers on the market. But the price of energy has soared in recent months, leaving many suppliers to close.
A number of smaller energy firms have gone bust in recent months, including Social Energy Supply. Ofgem has confirmed the firm has closed and has been replaced by British Gas. This means that British Gas will take on the accounts of about 35,500 domestic customers.