Tue. Dec 11th, 2018

Will UK businesses face a power problem, post-Brexit?

power problem

Anyone who runs a business knows that getting the right energy deal should be a priority.  Ultimately, it will allow you to keep productivity high and overheads low, so your business can operate as effectively and profitably as possible.

With the UK – potentially – about to leave the European Union (EU), Uk companies will have to confront a new threat when it comes to their energy supply.  What will happen if the UK loses its place within Europe’s Internal Energy Market (IEM)?

For a while now, the UK has become dependent on energy imports from countries like Ireland, France and Norway, as well as other EU states. This could have major implications if we can’t secure a harmonised energy trade deal – with UK businesses (and homeowners) facing potential power shortages matched with increased energy costs.

The ‘green Brexit’ promised by the UK government is facing scepticism from some experts.  By leaving the EU, the UK would effectively no longer be legally bound to meet EU climate change targets. This means current measures to build a greener, more efficient energy landscape could in turn slow, or stall.

While the Brexit debate rumbles on, gas installation experts Flogas Energy, highlight what it might mean, and how businesses can best futureproof their energy supply.

What exactly is the Internal Energy Market (IEM)?

Founded in 1996, the IEM helps energy trading between the various 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.

What role does the IEM play?

Protecting customer rights – both individuals and businesses – and tackling energy poverty by guaranteeing the availability of affordable gas and electricity, is the IEM’s main role.  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.

What could Brexit mean for businesses in the UK?

Keeping a business powered (think heating and lighting, for example) could become more problematic.  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.

Will businesses’ eco obligations be changed?

EU members states have worked together over the last ten years to move towards cleaner energy. 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.

What can businesses do to prepare?

The Uk – after March 2019 – may no longer be able to rely on other member states if it experiences a problem with its own energy supply. 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.

With all this in mind, it could be prudent for UK businesses to  shop the market now if they want to secure the best post-Brexit energy deals. The silver lining is that the switching process can be straightforward by moving to a dedicated business energy supplier who will manage everything (including contacting the existing supplier) on your behalf.