Spark Energy Supply is part of a gas and electricity firm which employs more than 300 staff at its Selkirk headquarters.

Ofgem launched an investigation into the firm over non-payment of money due under the UK Government’s renewables obligation schemes.

Under the schemes, suppliers who do not source the required proportion of electricity from renewable sources have to pay into a buy-out fund administered by Ofgem. The amount of payments outstanding into the buy-out fund for 2017-2018 at 31 August was £102.9 million. Ofgem said a shortfall of £58.6m remains.

Ovo Energy has confirmed it has entered into a conditional agreement to buy the company and take on its customers.

Under Ofgem’s safety net, the energy supply of Spark Energy’s customers will continue as normal and the outstanding credit balances of domestic customers will be protected.

Mary Starks, Ofgem’s executive director for consumers and markets, said: “Our message to energy customers with Spark is there is no need to worry, as under our safety net we will make sure your energy supplies are secure and your credit balance is protected.

“Ofgem will now choose a new supplier and ensure you get the best deal possible. Whilst we’re doing this our advice is to ‘sit tight’ and don’t switch. You can rely on your energy supply as normal. We will update you when we have chosen a new supplier, who will then get in touch about your new tariff.

“Although we have seen a number of supplier failures this year, our safety net procedures are working as they should to protect customers.”