With news on Brexit negotiations shifting on an almost daily basis, it’s difficult to keep track of how we, the consumer, will be affected when we eventually cut ties with the EU. Many reports have shown that we’re likely to be worse off in the event of a ‘no-deal’ Brexit, but we wanted to drill down into the specifics.
Focusing on the energy sector, we aim to wade through the buzzwords and look at the facts on what Brexit means for renewable energy sources and energy rates.
How Will Actual Policy Be Affected?
In particular, the renewable sector will be left somewhat exposed when the UK officially leaves the EU. We will no longer be obligated to reach the targets set as part of the EU Renewable Energy Directive, so our government will be shaping our own renewable energy schemes.
If a ‘no-deal’ scenario becomes reality, the UK cannot participate in the EU Emissions Trading Scheme (ETS), which helps EU Member States to limit or reduce greenhouse gas emissions in a cost-effective way. We will also be leaving the EU Internal Energy Market (IEM) which is a network of gas and electricity transfers between EU member states, where energy is transferred tariff-free between countries. This is a particular concern for businesses heavily reliant on utilities such as electricity and gas.
Also, many large-scale projects supporting renewable energy sources are currently funded by EU institutions, so this is where the renewable energy sector could take a hit.
PM Theresa May has been confident about reaching a mutually-acceptable deal however there are concerns that we may be left with a one-sided arrangement where the UK recognises energy imports as it has before, but not reciprocated by the EU. Negotiations were said to have faltered last month, so we’re waiting with bated breath to see a comprehensive report on the governments plan for tackling climate change.
What Does This Mean for Consumers?
As oil and gas is traded on an international level, experts have confirmed that it’s unlikely we will experience any supply shortages. However, this is not the only direct impact that consumers will be concerned about following Brexit.
In terms of tariffs, power firms have warned that we could see an increase in prices as trade barriers could increase the cost of importing gas and electricity into the UK from across the Channel. Leading energy companies like EDF and Unilever have written to the government as they believe that imposing fines once the UK have left the IEM will hit consumers the hardest and also hinder the international battle against global warming.
What Can We Do?
Consumers have already been hit by price increases twice this year thanks to rising wholesale gas and electricity costs, so household outgoings on energy bills could rise even further if the government don’t reach a satisfactory deal for energy and climate change following our departure from the EU.
With increasing pressure on household budgets and continued uncertainty on what Brexit means for the future of our energy bills, consumers should be aware of rising prices of energy bills and consider their options. The solution is not likely to become clear until at least some form of comprehensive energy and climate change plan has been discussed within Brexit negotiations.
Article by Utilitywise
