Brexit and its potential impact on the UK energy market

 As of yet, the issue of the UK and its partnership with the EU (European Union) is still in flux.  All options are still currently on the table, including the possibility of the United Kingdom leaving with a ‘No Deal Brexit’.  In this eventuality, what are the implications regarding energy supply?  Particularly as Britain has become increasingly reliant imported energy, including from The Netherlands and France (both part of the EU).

Brexit has the potential to rock the UK’s energy network if some form of energy trade deal isn’t negotiated. Higher costs and power shortages are just some of the complications that could arise.

There are also concerns over how leaving the EU will change the UK’s green energy goals. Without the EU, the UK would no longer be legally tied to the climate change targets set by the Union.

In this short article, Flogas – a LPG bulk tank, bottles and cylinder supplier – outline how businesses can prepare for the potential energy cost of Brexit.

The current situation

It’s important to understand the UK’s current situation with the EU and the Internal Energy Market. The IEM was founded in 1996 to facilitate energy trading between EU states. It enables European countries to trade energy quickly, cheaply and easily – allowing them to respond to peaks and troughs in demand and supply. Effectively, countries in need of more energy can access it, whilst those producing more energy than they need can trade it in a common marketplace. The IEM is also responsible for tax and pricing policies, as well as setting (and implementing) norms and standards to guarantee the protection of the environment and the public’s safety.

IEM and businesses

Keeping energy affordable and available in order to deal with energy poverty is the main  aim of the IEM. One way it does this, is by developing pan-European supply networks that transport energy between countries. It’s also responsible for defining the roles and responsibilities of the key players in the energy market, and acts as a regulator to ensure the security of our energy supply.

Brexit

Brexit has the potential to make energy a lot more expensive and a lot more difficult to maintain reliably. Why? It’s all to do with interconnectors, which enable a cheap and easy flow of energy across borders. Interconnectors form a big part of the UK’s energy mix, and without access to them, the country could experience shortfalls, pushing energy prices up at the same time.

Green Implications

The EU has worked incredibly hard to ensure all its members aim for a greener future. However, reports suggest that once the UK exits the single energy market, UK businesses will cease to be subject to the same EU rules, regulations and targets surrounding renewables and energy efficiency. Whilst the UK government is adamant it will continue its unwavering commitment to tackle climate change, Brexit has the potential to delay or suspend current energy efficiency measures, pulling us further away from meeting 2030 carbon reduction targets.

Potential impact

By the end of 2019, the UK may no longer have the safety net of energy imports from the EU if its own energy supply can’t keep up with demand. With this in mind, experts expect the UK to become more vulnerable to power shortages — whether that’s due to extreme weather events, or generation outages in the pipelines or electrical interconnectors.  Businesses in the UK must prepare themselves with post-Brexit energy deals.

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