Martin Lewis explains how to reduce your energy bills

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The Government is reportedly accelerating contingency plans for the collapse of Bulb, which is Britain’s seventh-biggest domestic energy supplier and has around 1.7 million household customers. Ministers and officials, along with regulator Ofgem, fear that the company could fold as soon as this week as expectations of a rescue deal drop.

Sky News cited industry sources as saying on Friday that talks with a small number of potential buyers were continuing but others had pulled out.

They said a rescue deal remains a possibility however it was unlikely that Bulb could survive the month without new funding.

A Bulb spokesperson said: “Our discussions with multiple parties to secure additional funding continue to make good progress and we’re encouraged by the drop in wholesale energy prices.

“We expect the Government to monitor wholesale prices and their effect on the whole industry, but ministers and Ofgem have been clear we must emerge from the energy crisis with a competitive and innovative market, rather than a return to the oligopoly of the past.”

A Government spokesman said: “Ofgem – as the expert regulator – is monitoring the situation across the energy market for the continued impacts on high worldwide wholesale gas prices.

“We have put in place the powers and robust processes to ensure customers do not experience any disruption to their energy supply and that costs are minimised if a supplier should exit the market.”

Ofgem added: “There has been an unprecedented increase in global gas prices which is putting financial pressure on suppliers.

“We know this is a worrying time for many people and our number one priority is protecting customers.

“In the event a supplier fails, Ofgem and government have robust processes in place to ensure customers’ electricity and gas supply continue and domestic customers’ credit balances are protected.”

More than a dozen energy suppliers have collapsed in recent months due to rocketing global wholesale energy prices.

Ofgem might change the way it caps bills for millions of households across Britain amid the crisis.

The energy regulator has given no details of what adjustments it might make to how the cap is calculated, but will set out its thinking as it launches a consultation next month.

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At the moment, Ofgem caps the energy bills of more than 14 million households at £1,277 per year on average.

But due to a rapid increase in the price of gas, suppliers are now having to pay more for energy than the cap forces them to sell it for.

The consultation on potential changes will end in February, and they could be implemented at the beginning of April, when the price cap is set to change.

Even before potential changes, experts at analysts Cornwall Insight predict that energy bills will jump to £1,660 per year for price cap customers.

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