With all the main parties’ manifestos featuring heavily on the environment, the BEIS’s Public Attitudes Tracker showed strong public support for renewable generation. Labour also promised to renationalise the ‘Big Six’ energy suppliers to public ownership should it emerge victorious in the General Election…
As the Conservative Party swept to victory in the General Election on the morning of Friday 13th with a considerable majority; what does this mean for the UK energy markets with the almost certain exit of the UK from the European Union on the 31st January?
As the pound surged against the Dollar and the Euro as Fridays election result was confirmed, wholesale energy prices fell as some direction was finally in sight in regards to Brexit.
Net-Zero is still the target for the UK to be carbon-neutral by 2050. Boris Johnson has reiterated that the country ‘voted to be carbon-neutral by 2050, and we will do it!’ The challenge will be the implementation of the UK’s plan, matched with the EU’s Green Deal which was also launched last week seeking to match the UK’s goal.
The initial goal is a rapid expansion of investment in renewables, including low-cost onshore wind and development of innovative tidal energy. This will come with a large initial cost which many industry experts forecast to be met by higher taxes on energy bills pushing up costs to all businesses.
Businesses who have already entered into agreements or have put in place carbon-reducing targets should be rightly concerned as the UK’s imminent departure from the EU could mean a large overhaul of these existing sustainable energy agreements.
‘Get Brexit Done!’ It seems inevitable that the UK will leave the EU on the 31st January with the Tories large majority seemingly unchallengeable and indeed Mr Johnson is expecting to put the deal before Parliament for ratification as soon as this week! Interconnections to other countries may prove a hurdle following the UK’s exit from the EU, however the UK presently only gets around 6% of its power from interconnections to the continent. This is expected to double over the coming years making them more important.
The main issue could be with how the UK intends to trade on the IEM (the EU’s Internal Energy Market), with potentially lower trading power in the absence of trade tariffs. If the UK has weaker trading power, the prospect of increases to energy bills appear inevitable.
Talk to one of our energy experts to discover how the General Election result may affect your business energy costs on 0800 488 0915 or email [email protected]