Ireland sees first energy supplier fold amidst ongoing crisis

Bright Energy, an electricity supplier based in Northern Ireland, has been forced to cease trading due to rising energy costs.

Bright’s departure represents the first Irish casualty of the ongoing crisis. It will shut its doors for good in February following a wind-down process, with its 1,500 customers being allocated to Electric Ireland. 

Much of Bright’s business had already switched to other providers over the past few weeks, following the company's announcement it planned to leave the market. 

In a statement to its customers, Bright Energy said:  “Wholesale energy prices have increased by 200% and, unfortunately, operating under the current conditions with no sign of market recovery is no longer a viable option for us.

“We have now made the difficult decision to exit the energy market and we would like to take this opportunity to thank all of the amazing customers who joined us on an important green energy journey,” 

Customers have been urged to take no immediate action by Ireland’s energy regulator - The Commission for Regulation of Utilities - as the switchover to Electric Ireland is completed.

“While the decision by Bright Energy to exit the supply market is regrettable, the Supplier of Last Resort process ensures that this will not negatively impact customers," said commissioner Aoife MacEvilly.

"There remain 15 electricity and eight gas suppliers in the domestic supply market. These provide a wide range of tariffs and choices for customers to suit their needs."

While Bright Energy is the first supplier to leave the Irish market, the same cannot be said for the UK. Since energy prices started rising at the start of 2021, 28 providers have been forced to cease trading. 

Much of this has been blamed on the UK’s energy price cap, which limits how much companies can charge customers. As a result, they are unable to pass on the bulk of costs to customers. Ireland has no such a mechanism, with suppliers able to set their own prices. 

While this prevents providers from operating at the huge losses seen in the UK, it means that Irish customers are paying far more. Currently, Ireland has the highest energy bills in the EU when taxes are removed from the equation.

Global factors over the past two years have driven energy costs to record highs. This has been fuelled largely by huge demand in Asia following the relaxing of lockdowns and poor wind farm output from Europe. 

Meanwhile, the ongoing Ukraine-Russia standoff could push prices even higher. 40% of Europe’s energy comes from Russia, with fears growing that should sanctions be imposed or a conflict arise, the Kremlin could reduce supply.