Supplier and Shipper failure

Helpful information for Suppliers, Shippers and consumers in response to recent market events.

Related links

If you’re a Supplier wanting to replace a failed Shipper, then you’ll need to complete this form to start the process.

Supplier – failed Shipper replacement form

The gas sector is facing challenging times

There are an increasing number of Suppliers and Shippers ceasing to trade and exiting the market.

Ensuring minimal disruption to consumers

Xoserve and Correla are working with affected organisations, networks and the regulator to ensure the energy needs of consumers continue to be met.

If you’re a gas consumer, please visit How consumers are protected when energy firms collapse on Ofgem’s website.

Helpful information for Suppliers and Shippers

We’ve provided relevant information with links below to assist our Supplier and Shipper customers.

If you need more information, please raise a support request.

Raise a support request

What happens when a Shipper ceases trading

The information below relates to the traditional gas networks (such as Cadent, Northern Gas Networks etc), not Independent Gas Transporters (IGTs) as they have their own processes.

The Supplier may need to contact IGTs directly, although we expect their processes to be similar to Supplier Licence Condition 18 (SLC18 – p117).

SLC18 is universal, however the specifics within the IGTs’ Deeds of Undertaking may differ.

The obligations on a Supplier

The obligations on a Supplier in the event of their Shipper failing are detailed within SLC18 (p117) and cover the Deed of Undertaking requirements.

When a Supplier is left Shipper-less due to their Shipper’s unplanned exit from the market, the Deed of Undertaking is invoked.

Following the termination of the Shipper from the transporter’s network, the transporter will issue a notification to the affected Supplier invoking the Deed of Undertaking. This then comes into force the following day.

At this point the Supplier:

  • becomes responsible for energy and transportation charges for their portfolio

  • is required to place security to cover their portfolio for energy and transportation charges within two business days

  • is required to establish a relationship with another Shipper for their portfolio within 25 days

The security that is placed as part of the Deed of Undertaking is held in place until the Supplier's entire portfolio has been assigned to a new Shipper.

For questions relating to the Deed of Undertaking, please raise a support request.

How Shipper failure liabilities are funded by the industry

The Uniform Network Code (UNC) has provision for how Shipper failures are funded by the industry.

Section X 1.1.1 of the Uniform Network Code (UNC) states:

“The effect of the provisions of Section F4.5.3(a)(ii) is that, if a User fails to make payment of any Energy Balancing Charge when due, all other Users may become liable for (in aggregate) an equivalent amount (together with an amount in respect of the cost of financing such non-payment)”

For details of how the costs are calculated please go to Section F4.5.3(a)(ii) of the UNC.

For more information about how Shipper failure liabilities are funded, please raise a support request.

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