Brexit impact on energy and carbon management

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Brexit impact on energy and carbon management

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The UK has voted to exit the European Union in the referendum held on 23 June 2016.

Businesses and industries will now need to adapt their energy and carbon management to reflect future changes to energy markets, regulations and incentives.

Once the UK invokes Article 50 of the Lisbon Treaty, the formal legal process of leaving the EU will begin and give the UK two years to negotiate its withdrawal.

This period of negotiation will clarify the nature of the UK-EU relationship after Brexit, and future energy and carbon costs and opportunities.

Envantage is on hand to help UK companies navigate this period of change.

Although these are early days, the following developments are considered likely:

 

Energy Procurement

We are currently seeing stable electricity and gas prices on the back of well supplied systems.

However, future rates are likely to be volatile due to uncertainties in the sterling and the potential for the increased cost of gas imports. Longer term, the UK will continue to be influenced by the global energy market. Brexit may affect investor uncertainty and funding availability, with consequences for energy security and investment in generation capacity and the grid.

The Envantage procurement team can help you access the best supply contracts for your business moving forward.

 

The CRC Scheme, The CCL And Climate Change Agreements (CCAs)

The CRC Energy Efficiency Scheme and Climate Change Levy (CCL) are both the UK Government’s own schemes, and it is generally considered that these are unlikely to change.

The 2016 Budget announced that the CRC scheme will end April 2019 and the CCL will see a substantial step increase at that point, with Climate Change Agreements (CCAs) kept in place until at least 2023 offering higher CCL discounts to ensure that energy intensive industries remain protected.

 

ESOS

The Energy Savings Opportunity Scheme (ESOS) is the UK government’s implementation of Article 8 of the EU Energy Efficiency Directive.

Regardless of Brexit, it is expected that the format of ESOS will change in future, with the Government announcing plans in the Budget 2016 to simplify and combine the range of existing energy reporting schemes.

 

EU ETS

Companies participating in the EU ETS may face complications such as the validity of allowances when the UK leaves the EU.

However there is cause to believe that some form of similar emissions trading scheme will continue after Brexit, particularly as the UK already has national implementation measures and compensation schemes in place.

 

Renewables Incentives

EU legislation has contributed to an increase in renewable generation in the UK. However the UK government has its own legally binding carbon emissions targets to meet, and ministers have reiterated the UK’s position as a leader in the low-carbon movement post Brexit. It is therefore difficult to comment on what changes lie ahead the support of green generation.

 

How Envantage can help

Envantage provides specialist energy and carbon management services to businesses and industries across the UK.

Please contact our team today to discuss how Brexit will affect your costs, procurement, regulatory compliance and cost-saving opportunities.

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Call: +44 (0) 800 054 2577
Email: savings@envantage.co.uk

 

 

 


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