The UK Government’s auction of Bulb Energy, the country’s seventh-largest power utility, which collapsed in November, has attracted one bidder.
Octopus Energy, the country’s fifth largest utility, has emerged as the only bidder although the details of its bid remain undisclosed. If the government does not accept this offer, it may adjust the terms of sale to get a better price.
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The Financial Times quotes three sources as saying that the government “hardballed” potential buyers. It also cites sources saying that the UAE’s Masdar had initially planned to bid and entered discussions with the government before pulling out. However, it may now provide financing to Octopus for its bid.
Centrica, owner of British Gas, had also reportedly planned to bid for Bulb, but withdrew its bid in June. The government initially planned to sell the company before the end of July.
The administration scheme has cost at least £2.2bn ($2.64bn) in public funds. Charity co-ordinator Citizens Advice recently estimated that this will add approximately £164 ($195) to annual bills.
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Bulb announced bankruptcy in November 2020 after failing to secure new financing. It became the largest utility to go bust as a result of massive energy price rises in the UK. In total, 28 utilities collapsed between August 2021 and July 2022. Regulator Ofgem has now started a reassessment of its regulation of the market.
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By GlobalDataBulb had 1.7 million customer accounts when it went under. Unlike other utilities, Ofgem deemed this number to be unmanageable for other utilities, and the government brought the company into “special administration”, a form of nationalisation.
Since its founding in 2015, Octopus has quickly grown to become the UK’s fifth-largest remaining energy supplier. The company has also obtained the accounts of several other defunct utilities under Ofgem’s “supplier of last resort” scheme.
