The Brexit Vote 2016 - How will voting leave impact the renewable energy industry?
Since waking to the news on Friday morning that we will be leaving the E.U. the media (and rightly so) has been dominated by this news and the general implications this will have on both the short and long term future of the UK. Social media has been going literally crazy, sparking a range of comments, opinions and heated debates regarding last week’s referendum result.
Whilst there is clearly a difference of opinions on the ‘vote leave’ decision I think it is safe to say there is an agreement that everyone is slightly perturbed by what this actually means for the future of societies in the UK.
Energy Jobline wanted to look further into the renewable energy industry to see whether we could shed some light on how leaving the E.U. could potentially impact the future of this thriving sector.
Renewable Energy Growth in the UK
The pressure of E.U. has been a major contributor to the success of renewable energy in the UK. Enforced regulations from the E.U; coupled with the financial support has continued to ensure renewable energy is thriving within the UK.
The concern now is how Brexit will impact the billions of pounds in future EU funding for renewable energy projects in the UK. Energy and environmental professionals are concerned whether the UK could fall short on its promises to reduce carbon emissions due to lack of EU support.
Britain’s carbon emissions goal is more ambitious than the collective target of the E.U. Under the 2008 Climate Change Act, the UK is committed to reducing emissions by at least 80% in 2050 from the 1990 levels.
However this being a domestic policy means any future British Government could technically decide to weaken or even completely scrap this target altogether. With Britain leaving the EU the country will not be pressured to meet the emission targets of the EU.
Supporters of the leave campaign stated that EU imposed laws that have resulted in increase in electricity prices, closures of coal-fired plants and overall higher energy taxes. According to the leave campaign website a move away from the EU will allow us to cut energy costs, eradicate ‘harmful’ regulations and ensure essential power plants stay open.
At what cost and implications this will have to carbon emissions and renewable energy seem to be slightly overlooked.
Future Renewable Energy Projects
Leaving the EU inevitable means we will risk losing vital funding for future renewable energy projects. Currently the UK is the biggest recipient of allocations of proceeds from the EIB Climate Awareness Bonds (European Investment Banks).
Overall the EIB lent Britain 7.8 Billion Euros last year – about 1/10 of the banks lending volume.
Under EU law, only member states can be EIB shareholders. Britain wouldn’t necessarily lose its place. Technically the EIB could still lend to UK projects as long as the bank gave its approval. However the overall financial support would likely be dramatically reduced.
There are still questions of uncertainty which largely depending on what time of relationship the UK will have the remaining 27 members of the EU. There are several approaches the UK could take. For example the UK could decide to follow in the path of Norway, which is not an EU member but is within the European Economic Area Agreement. This would mean Britain would have to comply to EU renewable energy quotas and energy efficiency targets but wouldn’t have the political power to have any say or influence on these standards. Bearing this in mind it is unlikely this would be a ‘politically popular’ choice.
The alternative approach is to become more independent which possibly would limit the nation’s access to cheaper energy markets. Cutting connections with the EU could potentially leave businesses and consumers which higher bills. Many of these unanswered questions will depend on the decisions of the UK government and the reaction of EU members to our decision to leave the EU.