Lights go out for two more energy retailers
Two more energy retailers are exiting the market, bringing the number of casualties since the wholesale price shock up to nine.
Retailer woes are far from over, with AEMO announcing that two more electricity retailers, Mojo Power and QEnergy, both owned by iON Group, are being wound up, and their customers are now subject to the Retailer of Last Resort provisions.
In addition to Mojo Power and QEnergy, parent company iON Group also ran Sanctuary Energy, acquired by Mojo Power after the wholesale price shocks started in 2022, and People Energy (a trading name of Mojo Power East Pty Ltd), which went through the RoLR process in July 2022.
These two most recent retailer failures underline how difficult it is for small retailers without generation assets to compete in the current retail environment in Australia.
The overarching Mojo strategy was to promote renewables by directly purchasing renewable generation output and retailing to consumers and via their B2B Mojo Marketplace platform:
iON Holdings Managing Director Warren Murphy described the pressures on this model posed by COVID-led late payments in his response to the AER's 2020-21 DMO Determination :
The Australian Financial Review reported in September 2022 that iON had been seeking additional debt financing:
Street Talk understands iON has fronted potential investors in the recent weeks hoping to pull together a $30 million to $40 million debt package, which would help tide over spot prices’ volatility and limited hedging opportunities.
These two new retailer exits means there is now a total of nine retailers driven out of business since the wholesale price chocks began in June 2022.
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