December 12th 2018
THE IMPACT OF BREXIT ON THE ENERGY SECTOR
The production and consumption of energy resources is extremely important to the global economy. In the energy world, operators have to plan in advance, because the delivery of energy into people’s homes and businesses is not a straightforward matter.
Winter has arrived which means there will a surge in energy usage across homes and businesses in Britain. Now is the time to carefully monitor your energy usage and do your research to find the best deals to make sure you’re not overspending unnecessarily.
WHERE BREXIT COMES IN
The UK is scheduled to leave the EU on 29th March 2019. In light of the decision to leave, numerous issues have arisen which bring about a divide between the UK citizens and the government.
The UK’s exit from the EU could result in higher energy bills according to Energy UK, the trade association for the British energy industry and a House of Lords committee. Questions around whether the UK will remain in Europe’s carbon trading scheme; The EU Emissions Trading System (EU ETS) could be a factor in the increase of bills, as well as the UK not being able to sustainably produce enough energy for its homes, and instead importing energy sources from overseas. The drop in the value of pound also adds to the increased energy costs.
We import 47% of the gas we use via pipelines from Europe and Norway. The remaining 9% comes in to the UK by tankers in the form of Liquefied Natural Gas (LNG). As things stand, UK gas and coal make up almost two-thirds of the UK’s energy mix (30% each), while nuclear accounts for 19% and wind makes up 9.5% of energy generation. The rest is split between bioenergy, solar, hydro and other forms of generation.
Part of your energy bill goes towards investing in renewable energy sources and funding energy improvements to hit green energy targets and meet the pollution targets set by the EU. Once the UK’s membership to the EU has reached its expiration date, there’s a likelihood of these targets being changed.
FUTURE INVESTMENT
As a result of Brexit, the government faces a bit of conundrum when it comes to achieving its goals with regards to energy. It needs to secure durable supplies, whilst cutting carbon emissions and providing affordable energy at the same time. Vivid Economics and Cornwall have fears that the UK will fail to drum up investment to fund the lower carbon initiatives set out for the future, an issue which is heightened by the decreased value of the pound and the potentially expensive costs of importing sources, equipment and services.
Britain will remain part of the EU ETS until the current trading phase ends in 2020, even though the leaving date is March 29th, but with this plan in place, it is likely the uncertainty will create cost pressure that will be reflected through customer bills.
WHAT’S THE SOLUTION?
The best advice would be to do your research to find the best deals. It can be time consuming and a little frustrating wading through endless quotes and offers but if the end result is money saved then surely, it’s worth it! Another thing would be, be prepared for the changes to come next year.
At Lily, we offer a free service to find you a range of tariff options to best suit your business. We’re partnered with a portfolio of 20+ energy suppliers that are constantly updated year on year, meaning the extensive research is done for you. We can lock prices in, 3 months prior to the existing contract date and we have the option to lock these in 1-5 year terms ensuring customers can project their energy costs through the Brexit Process.
Also, the energy market is increasingly volatile, with a number of suppliers such as; Spark Energy, Extra Energy, Flow Energy and Future Energy, going bust and exiting the market. We have access to the whole market including the top suppliers, giving you complete access to the most competitive pricing as well as peace of mind.
To find out more, go to our dedicated Energy page and find out how we can potentially save you 40% on your energy bill.