Energy companies in the UK have asked the government for financial backing to help them cope with the impacts of the coronavirus impact.
The Financial Times has reported that Energy UK, the sector’s trade association, has approached the government to ask it to back a loan scheme worth up to £100 million/month so that they can offer payment holidays to households and businesses.
Electricity demand and energy prices have dropped since the outbreak of the Covid-19 virus in Europe and the industry is concerned that the added pressure of rising customer debts will further squeeze their financial positions.
Energy UK said on 17 March that the industry is ready to provide “all the help and support it can to its customers through this difficult time” but that the government should “look at providing financial support to energy customers at a time when many households will be struggling to pay for necessities and essential services.”
Fierce competition in the energy retail market in the UK and a government-imposed price cap have squeezed suppliers’ profits. Around 19 energy companies have collapsed since 2016, according to Ofgem.