Green and Avro energy: Two more providers go bust amid surging gas prices

ITV News Political Correspondent Libby Wiener reports on the impact of Green and Avro energy going out of business

Two more of the UK's energy firms have gone bust amid surging wholesale gas prices which are crippling the industry.

Avro Energy and Green Supplier Limited, which together provide energy to almost 3% of the UK market, will have their previous customers transferred to new suppliers by industry regulator Ofgem.

Their almost one million customers are being advised to wait until a new supplier contacts them before they search for a new provider themselves.

Ofgem said: "Wait until a new supplier has been appointed and you have been contacted by them in the following weeks before looking to switch to another energy supplier.

"Take a meter reading ready for when your new supplier contacts you. This will make the process of transferring customers over to the chosen supplier, and paying back any outstanding credit balances, as smooth as possible."

The regulator ensured concerned customers that "outstanding credit balances of domestic customers will be protected".

Customers will also be protected by the energy price cap when being switched to a new supplier.

Neil Lawrence, director of retail at Ofgem, said he wanted to "reassure" customers that they "do not need to worry".

He added: "Any customer worried about paying their energy bill should contact their supplier to access the range of support that is available."

But many, like Sara Kenny, a charity worker in Manchester, are concerned about the price hikes.

Ms Kenny said she is now living from pay check to pay check, worried her energy bills could mean a difficult winter ahead.

She told ITV News: "Even though what I assume from what the government is saying is it's temporary, I almost feel like it might not be for me because of the position of my life that I’m in.

"I’m young, I’m renting, trying to save for a deposit and stuff like that, so this could have an impact on my life for a long time.

"It is very, very worrying for me." 

Earlier ITV News Political Editor Robert Peston revealed Avro Energy, which has 580,000 customers, was in financial trouble after it defaulted on the industry's balancing and settlement code.

The fall of Avro Energy and Green Supplier Limited - which has 255,000 customers - follows the collapse of People's Energy, which went bust last week.

The UK's energy market is battling with global gas shortages, which have led to the wholesale price of gas rocketing by 250% since January - with a 70% increase since August alone.

Seven firms have so far ceased trading, but some analysts believe more than 35 more could cease trading by the end of winter.

Along with Avro, Green, and People's Energy, the other providers which have already gone bust this year are: HUB Energy, PFP Energy, MoneyPlus Energy, Utility Point, People’s Energy.

Why has there been a rise in gas prices?

The rise in gas prices has been blamed on a number of factors, including a cold winter which left stocks depleted, high demand for liquefied natural gas from Asia and a reduction in supplies from Russia.

In addition, cables that import electricity from France were recently damaged in a fire at Sellindge in Kent.

It saw half the site's capacity taken out, while the other half was unavailable due to a planned outage. National Grid extended the planned outage from September 25 to October 23.

And September has not been a very windy month, meaning more gas is needed to produce electricity.