Posted on: 09/08/2016
The UK’s decision to leave the European Union (EU) will have significant knock-on effects for the renewable energy and nuclear sectors, according to a new report.
Analysis by consultancy firm Frost & Sullivan concluded that Brexit might not affect the energy projects that have already been allocated funding.But the paper warned that the future funding for UK interconnection projects could slide down the priority list or even be cancelled outright.
It said that Brexit has put a cloud of uncertainty over the future of nuclear projects, the UK’s commitment to renewable energy and the costs of power infrastructure projects.
Energy prices predicted to rise
While it expects the short-term impact of Brexit on the energy industry is likely to be benign, in the medium- to long-term the decision to leave the EU could lead to challenges such as:
- a rise in electricity prices;
- supply security issues due to the phasing out of coal plants;
- delays in nuclear power coming online;
- a slowdown in new renewable energy projects;
- Single market question
Jonathan Robinson, Energy & Environment Principal Consultant at Frost & Sullivan, said: “It is important to note that despite Brexit, the UK remains a liberal and attractive investment destination.
“The withdrawal from the EU has caused some market turbulence, but the fact is that the UK’s ageing infrastructure needs to be replaced over the next 15 years and decisions on that have to start to happen.
“There will continue to be uncertainty regarding the future strategies of the energy industry until the details of Brexit become clearer.
“Assuming that the UK remains part of the single market, it will still have a role to play in the greater integration of Europe's electricity system.”
> Read a sample of the report