Energy industry trade association Energy UK has suggested that the debt owed to the retail energy sector has risen sharply from Ofgem‘s 2022 estimate of £2.5 billion to an estimated range of £3.5 billion to £3.6 billion, with an average of £129 owed per household.
Energy UK’s Chief Executive Officer, Emma Pinchbeck, spoke about the challenges faced by the energy sector at the 2023 Vulnerability Summit hosted by Ofgem on 24th April.
In addition to support for vulnerable consumers, investment challenges loom due to a global supply chain shortage and competition from other markets, according to Emma Pinchbeck.
Pinchbeck said many retail companies are loss-making, so support for vulnerable customers is funded either by taxpayers or through higher bills for others.
She added: “This is why it’s important for the regulator and for government to ensure that cost distributional impacts, which is wonk speak for “the cost impacts of right across the system with our consumers and bills” when we’re making interventions in the market for households and for industry are properly evaluated, we need impact assessments, we need to know what things will really do, and that they are transparently considered in conferences and rooms like this one.”