As you may have heard, the UK recently voted in a historic referendum that resulted in us actually leaving the European Union. The result has taken many by surprise, including Prime Minister David Cameron, who has since resigned. The question on everyone’s lips now is, what will life be like now post-Brexit?
Throughout the referendum campaign we’ve heard a fair amount on the negative impacts Brexit would have on the UK economy and more specifically the UK’s energy sector.
Now not everyone is a big fan of change, however, it doesn’t look like we are going to have much of a choice.
Through a bit of research, it appears that it will be utilities that stand to be most affected within this sector. The deciding factor on the severity of the effect is if Britain will remain in the EU’s Internal Energy Market (IEM) or not.
Industry Experts Reaction To The News
Both SSE and National Grid have urged the Government to ensure Britain remains in IEM as it ensures smooth trading of gas and electricity between its members. However, if we do end up excluded from the IEM, it could result in costing UK consumers £500 million a year. It is a hefty price to pay, but this is due to disruption to electricity trading and the potential cancellation of plans for new undersea power cables to the Continent.
Other industry experts have added their views on Brexit; a senior editor at the Economist stated ‘the result had put a lot of uncertainty over the UK’s energy industry.’ While others are very matter of fact and have stated that ‘we have always been an island and that our energy system is used to being isolated from the continent.’
However on a more positive spin, now the UK has left the EU it means making energy deals with countries such as China will be a lot easier which could increase the UK’s attractiveness for investment.
Exerts taken from; http://www.telegraph.co.uk/business/2016/07/02/what-does-brexit-mean-for-the-key-parts-of-the-uk-economy/
