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Energy Blog Brexit Campaigns Battle over Energy Sector

Brexit Campaigns Battle over Energy Sector

Kiran Jutti
by Kiran Jutti June 17, 2016
Energy Prices

The two sides of the debate on the UK’s future EU membership have clashed over how the energy sector will be impacted by this month’s vote.

Energy and climate change secretary Amber Rudd had suggested earlier this year that a vote to leave the EU could see energy bills for UK consumers rise by £500mn/ year overall. But this claim has been disputed by Andrea Leadsom, Rudd’s colleague at the Department of Energy and Climate Change, who is campaigning for the UK to leave the EU.

In a speech on 17 May, Leadsom said that “absolutely none” of the UK’s work towards addressing the energy trilemma would be jeopardised by a vote for Brexit. The UK’s environmental commitments were, she explained, enshrined in domestic legislation, while electricity would continue to flow through interconnectors to and from the continent irrespective of the way people voted.

Leadsom warned that new European Commission proposals could in fact pose a threat to the UK’s gas supply: the Commission’s “winter package” requires member states to take on legal responsibility for each other’s gas security – meaning that, if another member state faced a shortage, the UK could be required to support it by depriving domestic businesses of supply.

Meanwhile, experts have continued to examine impact that Brexit would have on the UK’s energy and environmental policies. In a briefing issued on 26 May, the influential Chatham House think tank said that remaining in the EU offered the “best balance” for the UK’s interests in relation to energy policy. It argued that all of the models for Brexit would create regulatory uncertainty until a new framework of EU-UK relations was settled, and that this could take some time.

The report added: “The debate on Brexit risks being simplified to a choice between the status quo or leaving the EU altogether. Missing from the debate is the sense that in the sphere of energy, EU integration is moving in a direction that could benefit the UK, and is being actively shaped by UK policy.

Energy has not played a leading role in the debate over Brexit, perhaps reflecting a sense that a vote to leave the EU need not (directly at least) have major implications. However, the potential for subsequent political upheaval at Westminster has not passed without note, and could in the long term prove more consequential for the sector.