BRITAIN’s biggest independent energy supplier, BizzEnergy, may collapse into administration after struggling to refinance its debts.

The company hired KPMG last week to conduct a quick auction and was hoping to find a buyer this weekend. If it does not, it could file for administration this week, putting 160 jobs at risk.

Its problems will raise fresh questions about the competitiveness of Britain’s energy-supply market, which is dominated by the big six utilities. Ten days ago Electricity 4 Business (E4B), another independent energy supplier to business, went into administration.

Meanwhile, Welsh Power has hired Lexicon Partners to sell it for up to £250m. Likely bidders include Dong Energy, Intergen and Ireland’s ESB, which were the final bidders on the cancelled auction of Conoco Philips’s Immingham power plant, said Will Ainger of the energy-intelligence group Sparkspread. The company is owned by a group of financial investors led by DE Shaw and Deutsche Bank.

Welsh Power and BizzEnergy both criticised EDF’s recent purchase of British Energy because it would further consolidate the generation market, making it difficult for small players to obtain power at competitive prices.

Alex Lambie, head of Welsh Power, called the British Energy takeover a “stitch up” that would hurt competition.

Small suppliers have also been hit by the surge this year in wholesale electricity prices. Business suppliers like BizzEnergy and E4B provide power on fixed contracts that are often much longer than they can get in the wholesale market. If they do not hedge sufficiently against price rises, they have to absorb heavy losses.

“The main trouble for ind-pendents is the extent to which prices in the wholesale electricity market increased, and then doubled again. Any exposures they had, that’s what undid them,” said Derek Myers of Buyenergyonline.com, an energy retail exchange.

After the British Energy takeover, about 80% of the power generated in the UK will be controlled by the big six utilities. Between them they control 99% of the retail supply market. Rothschild has been hired to sell Prenergy, which is behind a £400m biomass plant in Port Talbot that will burn wood chips shipped in from Canada.

The 350MW plant will be Britain’s largest biomass-fuelled producer when it comes into operation.

Bid documents have gone out to all the big utilities. Producers heavily reliant on coal – such as Scottish & Southern, RWE Npower and Eon – are expected to be interested because the plant will qualify for generous subsidies under the government’s renewable energy generation scheme.

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