Brexit on the energy sector

 By Amanda Saint

The fallout from the UK’s “Brexit” vote is reverberating around Europe and its impact is going to be felt well beyond the shores of the small island that has opted out of the EU. But what will Brexit mean for the energy sector’s finances, people and innovation…?

The energy sector in the UK and Europe is made up of cross-border collaborative projects, businesses and university research centers that have thrived under the EU with access to funding, free movement of people, and the ability to easily bid for work in other countries. In light of the UK’s vote, there is great concern from many quarters that investments will stall, costs will rise as employing people will soon involve visa applications, and, perhaps most importantly, the UK will no longer be seen as such an attractive place for Europe’s brightest and best to live and work. But is it all bad news for energy after Brexit?

Vattenfall, a Swedish state-owned energy company, is one of the biggest providers of energy in Europe, producing electricity and heat from wind power, nuclear power, natural gas, biomass, coal power and hydro power. It has a UK office and is involved in numerous UK renewable energy projects that stretch from the south coast of England to northern Scotland, including 10 new wind projects at various stages of development, eight wind farms in operation and a solar farm that went live in March 2016.

It’s business is very UK-centric and the changes that are going to be implemented as the country exits the EU will no doubt have a big impact. A spokesperson for Vattenfall said: “Vattenfall is in the UK for the long term to grow its sustainable energy business thanks to a generally supportive energy policy framework, legally binding climate targets and strong market fundamentals. We still want to grow in the UK, particularly in wind power, but clearly a significant change like an exit from the EU introduces more risk to the sector for an unforeseen period of time. We aim to understand and assess that risk on an ongoing basis, as we would with any policy or treaty change .”

So, although the UK has long been a part of its long-term business plan, Vattenfall is recognizing that a significant level of uncertainty now surrounds the future of projects.

SEE MORE: Brexit, a Shakespearean tale of sound and fury by Paul Betts


Meanwhile, over at the British Hydropower Association (BHA), CEO Simon Hamlyn is disappointed and worried about the result. “The levels of uncertainty about the future of EU grants being applied for by UK businesses is of great concern as many hydro-related projects are dependent on this financial support,” he said.

It’s not just the impact this could have on funding that has him worried Hamlyn. Environmental targets agreed under EU directives could also be subject to change and the BHA has stated to its members that it will be pressing the UK government to maintain its focus on the EU-wide carbon reduction targets and the commitments made at COP21 in Paris last year.

“The UK still has an obligation to achieve these targets within the agreed timescales. It is currently unclear what leaving the EU will mean for the future of the UK’s renewables industries and ambitions, but existing renewable energy targets have been part of a wider European framework.”

But while the Conservative party have been fighting amongst themselves following the vote, the BHA has concerns that the bigger challenges of implementing the outcome of the referendum may delay decisions by the Government on crucial issues for the hydropower sector over the next two years as the UK negotiates its exit from the EU.

Energy management sector was “firmly in the ‘Remain’ camp”...

Vinicius Valente is the Communications Adviser for EUREC – the Association for Renewable Energy Research Centres in Europe – he said: ” We regret the UK’s decision to leave the European Union despite all the breakthroughs achieved by the EU in several strategic areas, including excellence in science. Our UK members are all prominent research centers who have been working for many years with EU funds to unlock the potential of several technologies.”

The concerns about what the future might look like in the UK in a post-EU world have spread beyond the renewables world into the wider energy sector. E.on Energy is a German company and one of the biggest suppliers of gas and electricity in the UK, powering and heating 5 million homes and businesses and employing over 10,000 people.

When asked what the vote and the UK’s eventual exit from the EU means for E.on, a spokesperson for the company said: “The UK EU referendum was always a matter solely for the voters and they have now spoken. It is expected there will now be a period of negotiation led by the UK Government and during this time and beyond our focus will remain on our customers.”

So, along with much of the UK’s population, the general feeling from the energy sector’s businesses and advocates is of not really knowing what the future might bring.

The Government’s Department for Energy and Climate Change didn’t respond to request for comment, but it obviously has a significant job to do over the next two years to secure energy supplies while ensuring that the UK’s energy businesses and experts continue to benefit from investment that will enable them to develop new solutions to the challenges the world faces.

about the author
Amanda Saint
Journalist and content writer, specialised in engineering and technology with a focus on environmental sustainability, urbanisation and biotechnology.