Energy bosses told the government on Wednesday that the energy industry was facing a "different kind of change" in the market, in a committee called to scrutinise he current issues affecting the UK gas market.
Speaking to the Business, Energy and Industrial Strategy Committee, Jonathan Brearley, CEO of Ofgem, the UK's energy market regulator, said the current shift is different from what had been seen in previous years, and was having a "significant impact" on the sector.
"It's far above what we had forecast," he said, referring to the price shift.
He said a "large number" of customers would be affected. Without stating an exact figure he said it could hit upwards of hundreds of thousands of people.
“We do expect large numbers of customers to be affected, we’ve already seen hundreds of thousands affected, that may well go above that. It’s very hard for me to put a figure on it,” he said.
Brearley said that the UK has a resilient and reliable system of electricity supply and emphasised it was highly unlikely there would be a situation where it runs out completely.
The committee was called as consumers face rocketing prices and wholesale gas costs threaten to put smaller suppliers out of business.
Reasons behind the dramatic increase in power prices include low gas reserves, strong commodity and carbon prices, heightened global demand, and low wind output.
Emma Pinchbeck, CEO of Energy UK said the trade group was seeing record breaking numbers of customers calling concerned about the increase in prices.
Pincheck emphasised it was an opportunity to take a look at the UK's retail energy sector and changes that could be made.
She said that ultimately, consumers end up picking up the bill when prices rise.
“We have to prepare for longer-term high prices,” said business secretary Kwasi Kwarteng, speaking later in the session.
He said that information about help for consumers and support for the market could be announced in October’s budget.
Kwarteng told the BBC on Tuesday that the government was considering lending money to bigger gas firms to help them take on stranded customers, following comments that the government wouldn't "prop up failing companies."
"I do not think it's the right thing for taxpayers' money to be injected into companies that have been badly run," he said.
Building on those comments, on Wednesday, he said he didn't want to go back to a "cosy oligopoly" where the market was uncompetitive.
Kwarteng added that it was difficult to put a figure on how many firms would go out of business, saying: "We are going to want to have a 'lessons learned' after this.
"It's not unusual for suppliers to go out of the market. I think what is different this time is that dramatic change in the costs that those suppliers are facing.
"We do expect more (suppliers) not to be able to face the circumstances we're in, but it's genuinely hard to say more than that, partly because that means predicting what may happen to the gas price."
He said 55 companies currently exist in the sector and it is unlikely that all of them will be bailed out by the government.