'Greater scrutiny' needed over new energy companies
- 28 November 2016
- From the section Business
A former chief executive of one of the UK's biggest energy suppliers has said that greater scrutiny of new entrants to the market is needed before they get their licence.
Paul Massara, who was in charge of Npower from 2013 to 2015, told BBC Radio 5 live Drive that Ofgem needs to do more to protect consumers.
At the weekend, GB Energy Supply ceased trading.
It said recent energy price rises had made its business untenable.
Around 160,000 people are affected by its collapse.
GB Energy Supply said that, as a small supplier, it was unable to "forward buy" energy to allow it to access the best wholesale price.
Ofgem said: "Applicants have to go through a rigorous process to secure a supply licence. We carry out a number of checks before issuing a licence."
Mr Massara said not a lot of money was needed to set up a new energy supplier, saying: "You can get an off-the-shelf system for about £100,000 and get a licence within one month and get a full licence within five [months]."
"There are players that have entered the market who have been around for three or four years now that have built up sizeable businesses and I think they are secure and safe, but I think that some of the new entrants who have come in in the last year that possibly consumers need to look at."