Ofgem culls further batch of energy licences
Many of the UK’s challenger suppliers were set up as shell companies before being bought by their current owners.
Ofgem has ripped up another batch of energy licences held by companies linked to licence farms, as the regulator clamps down following a string of failures in the sector.
Seven energy companies across the UK had 11 gas and electricity licences ripped up between them.
Several of these had links to software companies which offer off-the-shelf energy companies to their clients.
It comes a week after the regulator culled another 26 licences linked to just five men.
Fourteen companies were hit in the last round.
Many of these were businesses set up years ago by the likes of Utiligroup and Utiliteam.
These companies apply for an energy licence for a shell company, and then sell it to wannabe suppliers.
The companies often come with software packages and other tools needed to run the business.
They can come for as little as £70,000, according to industry sources.
But demand from people wanting to set up their own energy companies has waned after a series of bankruptcies in the sector and the Government’s price cap on household bills.
This has left several shell companies on the shelf.
It is these Ofgem has ripped up, saying they have been inactive for too long.
Callesti Energy, whose gas and electricity licences were revoked this week, is linked to Steve Gosling, the finance director of Chorley-based Utiligroup.
Mr Gosling and Utiligroup were linked to four other suppliers whose licences were declared void last week.
Utiligroup also helped set up failed energy suppliers URE Energy, Brilliant Energy and Our Power, and several others that are still operating.
However, energy insiders say that off-the-shelf companies are valid ways of setting up a business.
They have spawned several successful suppliers, including Octopus and Bulb.
The businesses also say they are not responsible for what a supplier does after the new owner takes over.
Steve Peters, the boss of Utiliteam, is a former director of two companies whose licences were revoked this week.
A third company linked to Mr Peters had its licence revoked last week.
He was formerly a director of failed suppliers Toto and Solarplicity.