Last night, it was reported that rescuing the bankrupt energy company Bulb could cost taxpayers an additional £2.5 billion.
This weekend, Octopus Energy agreed to acquire the 1.5 million customers of Bulb in a deal approved by the government.
Nonetheless, the state will continue to prop up the bankrupt supplier throughout the winter.
Since its failure late last year, Bulb has been in “special administration,” resulting in billions of pounds in government damages.
Analysts warn that if the support continues, the cost to the government could increase even further.
Tony Jordan, senior partner at the energy consulting firm Auxilione, estimated that the cost over the following five months might exceed £2.5 billion.
Bulb is currently unprotected against further increases in wholesale energy prices, making it vulnerable to market instability.
You name it: a frigid winter and a nuclear threat from Russia. Anything could easily cause a rapid increase in the price of gasoline, said Mr. Jordan.
“And then that £2.5 billion will seem minuscule, as it may rise to £4, £5, or £6 billion.” This is the danger the government must consider.
The sale of Bulb to Octopus concludes a period in which the company was practically nationalized.
Business, Energy, and Industrial Strategy Secretary Grant Shapps stated, “This government’s first objective is to protect consumers, and today’s sale will provide essential confidence and energy security to customers throughout the UK at a time when they need it most.”
Greg Jackson, founder and chief executive officer of Octopus Energy, stated that his company will provide a “solid home” for Bulb’s clients.