Friday 06 September 2019 12:14 pm | Updated: Friday 06 September 2019 2:52 pm

Ofgem throws lifeline to 30,000 energy customers as Eversmart goes bust

Ofgem has said it will step in to protect nearly 30,000 customers as energy firm Eversmart added its name to a long list of suppliers that have gone bust in the past year.

The regulator told customers to sit tight as they wait for its Supplier of Last Resort process to kick in.

The 27,000 customers join a list of thousands more who have seen their energy suppliers exit the market in the past two years.

Since the beginning of 2018, around a dozen companies have gone bust. These have ranged from the small Ithaca with only a few thousand customers, to the large challengers, with hundreds of thousands.

So far customers have been able to rely on Ofgem’s systems to ensure that they are moved to a different supplier without having to lift a finger themselves.

However, the bankruptcies have also raised questions about the sustainability of a sector where dozens of new suppliers, often with no experience in the sector, have entered the market.

These firms can lack the financial backing they need and offer prices or deals that later prove unsustainable.

Eversmart was one of several companies that offer a referral fee if a customer signs up someone else to its service. In this case customers were paid £40.

It follows others, such as Economy Energy, Spark Energy and most recently Solarlplicity that have all exited the market in the last year.

Barney Cook, the chief executive of Eversmart Energy, was shortlisted for Natwest’s Great British Entrepreneur Awards as Startup Entrepreneur of the Year in 2018.

Alex Dickson, head of research at Switchcraft, which helps customers change their energy supplier, said: “Eversmart Energy’s demise is a clear signal that its survival of the fittest in retail energy at the moment; we should expect and be prepared for others to follow suit.

“A combination of the lower price cap, Brexit, and winter pricing is beckoning the perfect storm in retail energy this autumn; I wouldn’t be surprised if five or six more suppliers went down by the end of the year.”