How will Brexit affect the UK energy market trade?

Having a reliable and affordable energy supply is vital to all businesses, but with Brexit on the horizon, we are left wondering how it will impact the industry.

Brexit can be a complicated matter, especially when it comes to the affect it could have on the UK energy market and in reality, no one knows yet what will happen to our energy supply if we are left with a no-deal Brexit.

With this in mind, The Energy Desk have explored the potential outcomes of what a no-deal Brexit may mean for the industry and consumers, and outlined the basics for our readers!

What is the role of the EU in the UK energy industry?

The Internal Energy Market (IEM), primarily enables efficient, tariff-free trading of gas and electricity across Europe. Some of the UK’s biggest energy suppliers are either controlled or owned by European companies, leaving us heavily reliant on energy imports.

This includes German companies E.ON and Innogy, who own Npower, France, who are part owners of EDF and Spanish electricity utility company Iberdrola, the parent company of Scottish Power.

Produced in 2017, the House of Commons briefing paper detailed nearly half of the UK’s net electricity exports came from France, 46% from the Netherlands and 5% from the interconnector cables, enabling energy to flow between networks.

Impact of a no deal Brexit

Brexit poses one obvious risk: what will happen to the trading of energy across borders?

Departure from the EU without a deal could lead to the UK no longer reaping the benefits from the IEM, impacting the trade of electricity. Trading could become less efficient, with long-term supply uncertain and increased costs for consumers.

The EU doesn’t currently charge import duties on electricity, so costs could rise for energy companies if the UK was to leave the EU without a deal. Alternative preparations would need to be made in order for energy flows to continue.

Don’t worry, your energy supply won’t cut out. According to a government publication, the government, Ofgem and National Grid have worked together “to ensure existing measures are in place to deliver continuity of supply.”

Contact TED today!

At The Energy Desk, we are committed to finding you the best deal on your energy. Therefore, if you have any questions regarding energy costs, then contact one of our dedicated team today.

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How will Brexit affect the UK energy market trade?