Small gas firms in the Netherlands may go bust as prices soar

A gas drilling site. Photo: Graham Dockery
A gas drilling site in Groningen. Photo: Graham Dockery

A number of small energy companies in the Netherlands are starting to feel the pinch because of rising gas prices and may be ‘hoping for a mild winter’, the Financieele Dagblad said on Monday.

Some may even go bust as has happened in Britain and Belgium, because they have not hedged against the increase in prices, the paper said.

‘These are companies which don’t actually own gas reserves and have not covered themselves properly for the price explosion,’ Eelco Wessels Boer, commercial director of Innova Energie in The Hague said. ‘And there are also providers who have stopped supplying gas.’

‘The market expects that more than a handful will go bust, if it is a hard winter,’ Jan Willem Zwang, of energy advisory group Stratergy told the FD.

The Dutch energy market was liberalised in 2004 and there are now more than 25 suppliers licenced to offer gas and electricity to domestic consumers. Unlike the bigger companies such as Essent, Eneco and Vattenfall, small firms focus on supplying green energy or on low prices and are traders rather than producers.

Five energy firms have gone bust in the Netherlands over the past 15 years, including Robin Eneregie in 2019, which had 30,000 clients and Energieflex with had 50,000 customers in 2018. If a firm does go bust, their clients are taken over by another firm.

Household impact

The higher gas prices will help push up household bills by around €50 a year, the paper said.

Gas prices are going up because of a range of factors, including low storage levels following last year’s cold winter, and reduced supply from Norway and Russia.

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