The energy market could see two-thirds of remaining electricity and gas suppliers going bust in the next 12 months.
The worrying finding comes from a new report by the UK accountancy firm Price Bailey which suggests nearly 48% of the existing energy suppliers are at imminent risk of collapse.
The analysis looked at the credit risk scores of energy suppliers based on the Ofgem lists.
It found that excluding the so-called ‘Big Six’ and two companies with suppressed risk scores, of the 29 remaining suppliers of electricity and gas to UK homes, almost 66% have an above-average credit risk score.
The authors of the report also suggest 14 electricity and gas suppliers are deemed maximum risk, which puts them at imminent risk of collapse.
Matt Howard, Partner at Price Bailey, commented: “The energy supply sector is facing complete carnage as we head into the winter months.
“Businesses deemed maximum credit risk will find it almost impossible to access extra funding unless directors provide personal guarantees. Few directors will be brave enough to risk their personal assets to secure emergency funding in the months ahead.”