LONDON- Scottish Power, owned by Spanish energy giant Iberdrola, is set to stop selling energy to British industrial and commercial (I&C) customers, it said on Tuesday.
Energy suppliers have struggled in the face of soaring wholesale prices which hit record highs following Russia's invasion of Ukraine on fears of possible gas supply disruptions.
“The energy market is facing unprecedented challenges and we have taken the decision to exit (the) I&C market. There is no impact on existing business customers, we will continue to honour all contracts and no employees are affected by this decision," a spokesperson said via email.
The decision also comes amid media reports Gazprom Marketing & Trading Retail, which supplies energy to some 20% of British businesses, is seeking a buyer and could be placed in government special administration as customers try to exit contracts and sever ties with the subsidiary of Russian state energy firm Gazprom.
Centrica, owner of Britain's largest energy suppler British Gas, said earlier this month it would exit its gas supply agreements with Russian counterparts, principally Gazprom Marketing & Trading.
“We are aware that Gazprom Energy has a large presence in the non-domestic energy retail market. Gazprom’s retail business continues to trade in the UK and customers should exercise their own commercial judgement with regards to energy supply contracts," a Government spokesperson said via email.
More than 20 household energy suppliers went bust last year amid high prices before the Ukraine crisis, mainly because a price cap designed to protect households meant they were often unable to pass on rising costs.
No such protection is in place for business energy buyers but prolonged high wholesale prices mean it is still difficult for costs to be passed on if long-term contracts are in place.
(Reporting By Susanna Twidale, additional reporting by Kate Holton; Editing by Kirsten Donovan)