Securing a good energy deal is crucial when it comes to running a business. It’s a way to get your productivity levels up, while your overheads stay low so your business can operate as effectively and profitably as possible.
However, the imminent deadline for the UK to leave the European Union (EU) means that companies are facing a new concern when it comes to their energy supply. What will happen if the UK loses its place within Europe’s Internal Energy Market (IEM)?
Over the years, we have seen the UK become more reliant on energy imports provided by other countries, including Norway, France, Ireland and The Netherlands. 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.
While the government may have promised to deliver a ‘green Brexit,’ the environmental implications could be serious, according to 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.
As the outcome of final Brexit agreements gets closer, we ponder what it could mean for the UK’s energy infrastructure, and how our businesses will be able to best prepare to futureproof their energy supply.
What is the Internal Energy Market (IEM)?
The IEM was set up to facilitate energy trading between EU states. Founded in 1996, 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.
Tax and pricing policies are also the IEM’s responsibility. It also must set (and implement) norms and standards to guarantee the protection of the environment and the public’s safety.
What does the IEM do for businesses?
The ultimate goal is to protect the rights of individuals and businesses and to tackle energy poverty. The IEM aims to do this by guaranteeing the availability of affordable gas mains connections and electricity. 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 does Brexit mean for my business?
Brexit, in short, could mean that it’ll be trickier for businesses to keep lights and heating on, as well as making it a lot more expensive. 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 exiting the IEM change businesses’ eco obligations?
The member states in the EU have tirelessly worked together over the past 10 years to set a shift in motion 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.
How can businesses prepare?
The UK could find itself no longer able to rely on other member states after March 2019 if it experiences an issue 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.
This all shows that it’s important for UK businesses to start shopping around for the best post-Brexit energy deals now. The silver lining is that you can keep the switching process straightforward by moving to a dedicated business energy supplier who will manage everything (including contacting the existing supplier) on your behalf.