Australia’s first community-owned energy retailer Enova Energy has been placed into voluntary administration, with the “diabolical state of the energy market” forcing the company out of business.
Enova Energy is a Byron Bay-based community owned electricity retailer set up as a social enterprise and focused on renewable energy. It has 13,200 customers across New South Wales and South-East Queensland.
Simon Cathro and Andrew Blundell of Cathro and Partners have been appointed as administrators, with the first meeting of creditors to be held on June 30.
Cathro told SmartCompany the administrators are continuing their investigations and will report back to creditors once they have been completed.
“We are aware though that some of the shareholders may also be creditors, so we are working through that process and will communicate with them in due course,” he added.
In a statement to the media, Enova said prevailing market conditions prevented the company from securing suitable wholesale energy prices and renewing its contract with Diamond Energy. The cap imposed on consumer pricing, meanwhile, meant the company is no longer financially viable and had no other option but to enter voluntary administration.
Enova managing director and CEO Fiona Stening said the “market is broken and does not support small retailers”.
“The current diabolical state of the energy market, combined with the high wholesale market energy prices and the cap on customer pricing, has made it impossible for Enova Energy and many other small retailers to operate in the market,” she said.
Stening added that regulatory changes at state and federal levels have exacerbated the situation, leading to delays in securing funding and resource energy innovation.
John Taberner, chair of the Enova Community Energy, said the board’s decision to enter voluntary administration “has not been taken lightly and comes as a result of the organisation being extremely challenged in recent months by external factors, specifically the previously unseen activity on the wholesale energy market including severe and sustained wholesale electricity pricing”.
The news comes at the heels of continual upheaval in the energy market over the last few weeks, with several small retailers, including ReAmped Energy and Discover Energy telling their customers to leave before prices increase, while other retailers like Amber Electric have turned away new customers who don’t own solar panels or battery.
Last week, the Australian Energy Market Operator (AEMO) intervened in the wholesale market and took control, with the AEMO announcing the suspension of the National Energy Market will be lifted in a staged approach. According to a statement by the AEMO, it has seen improvements in the market conditions since the suspension.
AEMO CEO Daniel Westerman said that at 4am on Thursday, “we will allow the market to set the price again”, as part of the first stage, with a complete lift of the suspension likely for the second stage.
The AEMO will continue monitoring the market for the next 24 hours before making a decision to lift the suspension, but is still manually directing generators to add power to the network.
“By removing these conditions, we hope that the market will return to a normal bidding and dispatch situation – allowing the market to operate without major AEMO interventions and manual management of generation,” he said.
The suspension came as threats of blackouts loomed on the eastern seaboard, prompted by increased domestic demand coinciding with plummeting temperatures, planned generator outages and increased demand for Australian gas exports following Russia’s invasion of Ukraine.
The Australian Competition and Consumer Commission (ACCC) is also investigating the energy market for potentially “distorting or manipulating” prices, with the chair confirming yesterday the commission will act on requests made by Treasurer Jim Chalmers and other state and territory ministers.
SmartCompany has contacted to Enova Energy for further comment.
Gazala Anver is a technology and startups reporter at SmartCompany.
