Scottish Power will exit the UK industrial and commercial energy market

Power pylons and wind turbines are silhouetted at the Dun Law West wind farm, owned by Scottish Power, near Edinburgh, Scotland, January 8, 2010. REUTERS/David Moir/File photo

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LONDON, March 22 (Reuters) – Scottish Power, owned by Spanish energy giant Iberdrola (IBE.MC), will stop selling power to British industrial and commercial (I&C) customers, it said on Tuesday.

Energy providers have struggled as wholesale prices soared to record highs following Russia’s invasion of Ukraine on fears of potential gas supply disruptions.

“The energy market is facing unprecedented challenges and we have made the decision to exit the I&C market. There is no impact to existing business customers, we will continue to honor all contracts and no employees will be impacted by this decision,” a spokesperson said via email.

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The decision also comes amid media reports Gazprom Marketing & Trading Retail, which supplies power to around 20% of UK businesses, is looking for a buyer and could be placed in the government’s special administration as it customers try to get out of contracts and break ties with the subsidiary of the Russian company. state power company Gazprom. read more

Centrica, which owns Britain’s largest energy supplier British Gas, said earlier this month that it would exit its gas supply deals with its Russian counterparts, mainly Gazprom Marketing & Trading. read more

“We are aware that Gazprom Energy has a large presence in the non-domestic retail energy market. Gazprom’s retail business continues to operate in the UK and customers must exercise their own business judgment regarding energy supply contracts,” a government spokesman said by email.

More than 20 domestic energy providers went bankrupt last year amid soaring prices before Ukraine’s crisis, mainly because a price cap designed to protect households meant they often couldn’t pass on rising costs.

There is no such protection for commercial power buyers, but prolonged high wholesale prices mean it is still difficult to transfer costs if long-term contracts exist.

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Reporting by Susanna Twidale, additional reporting by Kate Holton; Edited by Kirsten Donovan

Our standards: the Thomson Reuters Trust Principles.

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