0800 464 7677Avro Energy
Avro Energy collapsed and ceased operations in September 2021 due to several factors, primarily linked to the volatility in the energy market and the company’s financial struggles. Their customers were taken over by Octopus Energy.
This was Octopus Energy’s most recent statement:
UPDATE TUESDAY 29th APRIL
With the Avro migration now complete for ~98% of customers, we wanted to share a final update to let you know what’s going on if you still have questions regarding your Avro account. At any point if you’d like to talk to our team about your account, fill in our Avro help form.
Of the handful of Avro customers that haven’t yet had their accounts closed off, it’s generally either because of issues with the data we received about your account from Avro; or, it could be that you were midway through switching to, or away from, Avro when they went bust. Being midway through a switch and then force-switched via a ’Supplier of Last Resort’ procedure makes the already mega complex cross-industry process much more complex, so tends to take longer.
Our expert team are manually working through a few hundred remaining accounts that had errors in the data we received from Avro. They’re correcting these errors and manually creating your final bills to make sure we get this exactly right for you.
There are a few more customers whose switch is stuck because of something totally out of our control…
- If you were midway through your switch to Avro when they went into administration (before they started supplying you power but after you’d already had a payment taken). Please don’t worry, your credit balance is safe.
- Accounts with issues on the national database – specifically, where your meter is still registered to Avro and we have to manually send/request changes for each one through the national database to get things correctly registered before we can progress. We’re working swiftly through the last handful now.
We aim to get quick resolutions for nearly all of these accounts within the next few weeks, but if you’d like to talk to us about your account sooner, fill in our Avro help form.
Click Here To learn More About Octopus Energy
Here are the key reasons behind Avro Energy’s downfall:
1. Soaring Wholesale Gas Prices:
In 2021, Europe experienced a significant surge in wholesale gas prices due to multiple factors, including reduced gas supplies from Russia, high demand for liquefied natural gas (LNG) from Asia, and a cold winter. As energy prices soared, many smaller energy suppliers, including Avro, found themselves unable to cope with the rising costs. Most of these suppliers, including Avro, had not hedged against price increases, leaving them exposed to extreme market fluctuations.
2. Ofgem’s Price Cap:
The UK’s energy regulator, Ofgem, imposes a price cap that limits the amount energy suppliers can charge customers for default tariffs. While this is designed to protect consumers, it made it difficult for energy companies like Avro to pass on the increased wholesale costs to their customers, squeezing their profit margins. The combination of rising costs and price caps left Avro selling energy below the cost they were paying for it.
3. Poor Financial Health:
Avro Energy was known to have had relatively weak financial health before the energy crisis hit. It was a smaller company with limited financial reserves, making it more vulnerable to shocks in the energy market. When wholesale prices skyrocketed, Avro lacked the resources to absorb the losses and continue operations.
4. Increased Regulatory Scrutiny:
There had been concerns over Avro’s financial viability even before its collapse. Ofgem had placed Avro under increased scrutiny as part of its drive to ensure energy companies were financially stable enough to operate. The combination of Avro’s weak financial footing and the external pressures of the energy crisis led to its failure.
5. Systemic Issues with Smaller Suppliers:
The energy market in the UK had seen a rapid proliferation of smaller energy companies that entered the market offering cheap deals. However, many of these suppliers had unsustainable business models that relied on consistently low wholesale prices. When market conditions changed, many of these smaller firms, including Avro, were unable to adjust and collapsed.
Impact on Customers:
When Avro Energy collapsed, its approximately 580,000 customers were transferred to Octopus Energy through Ofgem’s “Supplier of Last Resort” mechanism. This ensured continuity of service and protected customers’ credit balances.
Avro’s collapse was part of a broader trend during 2021, where numerous smaller energy suppliers in the UK failed due to the unprecedented rise in wholesale energy prices and systemic issues within the sector.
Message on shutting down:
Avro Energy is ceasing to trade. Ofgem, the energy regulator, is appointing a new supplier for its customers.
Customers need not worry, their supplies are secure and domestic credit balances are protected.
Ofgem’s advice is not to switch, but to wait until they appoint a new supplier for you. This will help make sure that the process of handing customers over to a new supplier, and honouring domestic customers’ credit balances, is as hassle free as possible for customers.
Support and advice is available on the Ofgem website for both domestic customers and non-domestic customers. Alternatively, if customers need additional support, they can call Citizens Advice on 0808 223 1133 or email them via their webform. Advice will also be shared on Ofgem’s twitter @ofgem and facebook channels.
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