What does the election result mean for the UK’s energy industry?

Green issues were discussed in the election like never before, amidst a climate of fear around the future of the planet.

The main parties all stated they want to reduce the UK’s greenhouse gas emissions to net-zero by at least 2050, if not before. While progress on this front has been positive, the UK is still nowhere near meeting its target and the Committee on Climate Change has said radical changes need to happen in the next few years.

Planning for the future

It is hoped that by 2025 that the UK will have a plan in place to replace gas as a source of domestic heating with all cars and vans on the road being electric by the early 2030s.

The withdrawal bill, paving the way for Brexit on the 31st January 2020, is due to have its second commons reading this Friday. In February, a huge reshuffle will occur once the UK has left the EU with an expected budget statement in March.

Once Brexit has taken place, the UK will be released from any renewable energy targets set by the EU. The availability of funding from EU institutions may impact the deployment of innovation or capital-intensive projects.

EU funding

There are several EU initiatives that promote investment of energy infrastructure and they currently represent an important source of funding for UK energy projects. Therefore, Brexit could leave the UK short of funding or having to look for other means to support renewable infrastructure projects.

Although the UK would still be bound by national and international decarbonisation obligations, it is expected low carbon energy development will carry on forming part of the government’s climate change policy.

In terms of pricing, UK energy prices would be affected if the EU imposes export tariffs on gas flowing to the UK.