Green Network Energy goes bust. What now?| energyscanner

Last Update: 1 October 2021

Green Network Energy ceased trading on 27 Jan 2021.

Green Network Energy is currently in administration. The administrator is Teneo Restructuring Limited.

Before it went bust, Green Network Energy had approximately 360,000 domestic customer accounts. These have been moved over to EDF Energy.

EDF Energy took Green Network Energy’s 109 tariffs and moved customers onto a much-simplified list of just 6 tariffs. These tariffs were all variable tariffs, but with prices guaranteed fixed until 30 Sep 2021. The new tariffs were very competitive and clearly designed to stop Green Network Energy customers leaving on masse.

For the tariff geeks out there, the new EDF tariffs were called Welcome GNE Variable (v1 through v5) and GNE Variable Prepay.

Energy bills, for the new Welcome GNE Variable tariffs, based on average consumption, ranged from £796 to £1,042. Those tariffs have now expired. All customers, who have not made an active tariff choice, will have been moved onto the EDF Energy Standard (Variable) tariff. If you were on one of these tariffs you will have been doing pretty well, for a while, at least Since 1 Ocober 2021, you will have seen your energy bills rocket by between 23% and 60% (Ouch!). Unfortunately, it is no going to get any better any time soon. When the energy price cap is adjusted again it will go up a lot. Our analysis of forward wholesale energy prices indicates that the energy price cap is forecast to increase by another £350-£400 on 1 April 2022.

Why did Green Network Energy go bust?

The latest published financial statements for Green Network Energy were for the year ended 31 December 2018. Subsequent accounts are overdue and, given that the company is now in administration, are unlikely to be published.

In the year 31 December 2018

Profit and Loss

Revenue: £142m

Loss: £20m

Balance sheet

Net Assets: (£29m) – ie negative £29m

This figure includes £7.6m of capitalised intangibles including £6m of capitalised commission.

If one excludes intangibles (which you should because capitalising commission is a very aggresive accounting policy), then net assets were negative to the tune of £36.5m. OUCH!

Joe Malinowski, founder of energyscanner.com noted. “This one surprised us a little. Green Network Energy seemed like a well organised, well-run business with lots of industry experience, albeit not in the UK market. It was generating revenue of approximately £300m a year. However, the financials paint a different picture. The company was horribly unprofitable and bleeding cash. It’s cost structure appears to be very bloated. We don’t know whether the company got caught un-hedged during recent increases in wholesale energy prices, or just ran out of financial run-way. But it does show that even £10’s of millions of funding is no guarantee of success, or even survival.”