Europe is suffering through an energy crisis currently and it is getting worse. The situation might even lead to widespread blackouts some have suggested, and the high record prices are expected to persist for some time.

a record run in energy prices

Energy costs are increasing in Europe and that is ringing alarm bells for many. There are many countries that are going to suffer because of the increase in prices and some suggest that the UK might be the worst hit of all because of the situation.

The situation has been linked to a shortage of natural gas in Europe and wind power isn't doing enough to meet demand.

This is fueling that spike in energy prices and it's bad news for competition in the energy market.

Starting in 2021 there were 70 energy suppliers in the UK, but now according to industry sources it might be as few as 10 who will be standing by the end of this year. In Europe currently there is high demand for gas and reduced supply which has been impacting wholesale gas prices, however it is the companies struggling more than the consumers. This is because companies are restricted from passing on those sudden spikes in wholesale gas prices to consumers through the energy price cap, which is the maximum price that can be charged on a standard tariff. This means a number of companies will go out of business who cannot weather the storm.

The situation is prompting the government to now step in and some wondering how bad it might get before things return more to normal. It is expected that these high prices could continue at least until the end of the year.

gas prices surge 250%

The gas prices have increased significantly and now the government might even consider giving state-backed loans to those surviving energy companies as well.

As the demand for energy climbs we need multiple energy suppliers in the market to be able to respond, and the more they decline in numbers the more difficult it might be for the remaining businesses to be able to cater to that demand without issue.

“All suppliers will be finding it very tough at the moment,.. Some of them are bigger and more resilient than others. But scale doesn’t equal automatically resilience.” - R. Buckley,

The situation is likely going to lead to more insolvencies for energy companies and as a result might drastically decrease the options in the market for consumers.

The government has insisted that the lights won't go out despite the crisis on gas prices.

And some have insisted that any talk of lights going out is only alarmist rhetoric that's "completely misguided."