Post-Brexit Rise in UK Energy Bills
Recent insights provided by Green Alliance have underscored the importance of fostering channels of co-operation between the EU and UK on energy and climate policy in the post-Brexit landscape. With a focus on achieving the best possible outcomes, Green Alliance has uncovered some potential risk areas associated with failed collaboration going forward which could result in escalating UK energy costs.
UK foreign gas dependency stands to rise to 42% and its long-term gas security stands to be seen in the face of extra-EU operations. Electricity interconnection with Europe brings down energy costs. This currently provides 7% of the UK’s energy. Continued influence of bodies such as the Agency for the Co-Operation of Energy Regulators and the Energy Transmission System Operators for gas and electricity – together with additional collaborative efforts surrounding sharing regulation, efficiency, and renewable energy targets – could bring more than £1 billion in energy savings to UK consumers beyond 2021.
Offshore wind (and renewable energy in general) – until now, a UK success story – is another sector facing potential threats to growth. Off the back of uncertainty over favourable finance terms from the European Investment Bank on leaving the EU, further growth in this industry is uncertain as loans are less likely to be given as freely. As such, it is fundamental that the UK negotiate its position with the EIB and other European investment bodies for sustained growth.
In addition to this, there is further uncertainty surrounding energy efforts geared towards 2030. Firstly, more than half the UK’s emissions targets to 2030 have been expected to be achieved through EU-derived legislation. This raises some very serious questions on applicable regulatory structures and governance going forward. The UK’s 2030 nuclear plans also stand to be unhinged in the wake of their exit from Eurotom.
In achieving positive outcomes, it has been proposed that the UK negotiates with the EU to achieve the objectives of the Paris Agreement and the EU energy union which will, in turn, lay the foundations for ongoing collaboration on energy and climate policy. Moreover, it is recommended that the UK continues to participate in the EU’s internal energy and gas markets.