DESNZ and HM Treasury
Policy direction affects the generation mix, delivery pace, and cost recovery path. Decisions on support schemes, market reform, and wider fiscal policy can influence what households ultimately pay.
Power system
How does the energy system respond when pressures build?
Supplier exits, price shocks, and delivery bottlenecks show why resilience, consumer protection, and institutional coordination matter. This page maps the main pressure points, who acts, how costs can be allocated, and which current reforms are intended to reduce harm.
29
Suppliers failed in 2021-22
4.3m
Customers transferred
£2.7bn
Mutualised costs on remaining bills
Bulb
Largest ever SAR (Special Administration Regime)
How does each institution affect your energy bill?
Every institution in the GB energy system touches the price consumers pay. Some set price signals directly, some shape recovery through regulation, and some influence the cost of delivery, compliance, and resilience over time.
Ofgem
Ofgem sets the default tariff cap, regulates network charges, and approves spending through price controls. Those decisions shape both short-term consumer protection and longer-term bill recovery.
Network operators (DNOs and transmission)
They own and operate physical infrastructure. Network costs are a material part of the bill, and growing electrification means further investment decisions will matter for both delivery pace and cost allocation.
Generators and suppliers
Wholesale market conditions, hedging strategy, and retail resilience all influence bills. When gas sets the marginal price, wider global fuel conditions can still feed through to GB consumers.
Citizens Advice and Consumer Panel
They provide evidence, scrutiny, and advocacy for consumers, helping surface where policy or market design may need stronger protections or clearer communication.
Environment Agency, HSE, NSTA
They add compliance costs. Environmental permits, safety inspections, licensing costs flow through to wholesale prices.
What are the main pressure points?
The GB energy system has several recurring stress patterns. A shock arrives, institutions intervene, and consumer protection or system stability measures follow. The cascade below shows how those stages connect.
2021-22 supplier crisis
Twenty-nine suppliers exited between August 2021 and March 2022, with more than four million customers transferred. Published post-event work then led to tighter capital adequacy and consumer-protection expectations.
29
Suppliers failed
£2.7bn
Mutualised costs
2022 energy price spike
Wholesale gas prices rose sharply, government introduced the Energy Price Guarantee, and the episode reinforced the importance of affordability protection, import diversity, storage, and crisis response capacity.
£40bn
Treasury cost
£2,500
Price Guarantee cap
Connections queue
Connections backlogs reached a scale that made reform unavoidable. The reform response has centred on moving capacity toward projects that are ready and needed, with staged reordering through 2026.
700+ GW
Queue backlog
10-15 yr
Average wait
Financial impact: the 2021-22 supplier crisis in detail
| Metric | Figure | Detail |
|---|---|---|
| Suppliers failed | 29 | Between Aug 2021 and Mar 2022 |
| Customers transferred | 4.3 million | Moved to Supplier of Last Resort |
| Mutualised costs | £2.7bn | Spread across all remaining customer bills |
| Bulb Energy (largest) | 1.6m customers | Entered Special Administration; cost to taxpayer estimated at £6.5bn |
| Consumer bill impact | £94 per household | Average rise from supplier failure costs passed through bills |
| Post-crisis reforms | 3 measures | FRP floor increased, capital adequacy stress tests introduced, Ofgem ring-fencing rules tightened |
Who acts when the system is under pressure?
Accountability in the GB energy system is distributed across multiple bodies. No single institution owns every stage from disruption to resolution, so the response depends on coordination across several statutory and operational roles.
| Failure type | Responsible body | Accountability mechanism | Typical response time |
|---|---|---|---|
| Supplier collapse | Ofgem | Supplier of Last Resort | Weeks |
| Network outage | DNO / Transmission Owner | Guaranteed standards scheme | Hours to days |
| Price spike | DESNZ / Treasury | Emergency fiscal intervention | Months |
| Grid instability | NESO | Operational protocols | Seconds to minutes |
| Environmental breach | Environment Agency | Enforcement action | Months |
| Safety incident | HSE | Investigation | Months to years |
Why did 29 suppliers exit in 2021-22?
Official reviews found that several suppliers entered the period with limited financial resilience and weak hedging against wholesale volatility. When gas prices rose sharply in autumn 2021, those vulnerabilities became unsustainable very quickly, which is why Ofgem later tightened resilience requirements.
What is the Supplier of Last Resort?
When a supplier exits the market, Ofgem can appoint another supplier to take on the customers. The cost of honouring credit balances may then be mutualised across bills. The SoLR process protects continuity of supply, while the subsequent cost recovery process determines how the wider system absorbs the disruption.
What could slow Clean Power 2030 delivery?
Clean Power 2030 depends on multiple reforms moving in step. These are the main delivery risks that still require coordinated action across institutions and programmes.
Delivery risk
Grid connections can take longer than project construction. If reform and network delivery do not keep pace, otherwise viable projects can be delayed while waiting for the wider system to be ready.
Adequacy risk
If firm capacity retires faster than clean alternatives commission, system margins tighten. The sector therefore still needs enough dispatchable and flexible capacity to manage extended low-wind periods.
Cost risk
Network reinforcement costs are significant, which means cost allocation remains an important public-interest question. Price controls, fiscal policy, and programme sequencing all affect how those costs are recovered.
Current direction
One of the central public-interest questions is how resilience costs should be allocated when the system is under stress. In practice, those costs can be shared across customers, taxpayers, market participants, or future price-control settlements. The policy challenge is to preserve continuity and consumer protection while keeping incentives strong enough to reduce repeat failures.
Why this matters now
Connections reform is one of the clearest live resilience tests because delivery risk, consumer value, and Clean Power 2030 all meet in the same queue. The current programme direction is to move capacity toward projects that are both ready and needed, while improving coordination between operators and reducing delay risk.
Methodology and sources
Last reviewed: 18 March 2026
This page draws on official reports, regulatory decisions, and public data to map how the GB energy system responds when it fails. All cost figures are from published government and regulatory sources.
Source
Ofgem Supplier of Last Resort decisions (2021-2022) and capital adequacy review.
Source
NAO report on energy supplier failures and consumer cost recovery.
Source
DESNZ energy price guarantee costings and Treasury fiscal statements.
Source
NESO connections queue data (2024-2026) and TMO4+ reform documentation.
Source
Ofgem guaranteed standards scheme documentation and enforcement reports.
Next route
How GB energy flows through six layers
Follow the architecture from generation through transmission, distribution, supply, settlement, and governance.