Running a business can be a lot more effective and profitable if you secure a great energy deal.
However, with the Brexit deadline now imminent and the UK close to leaving the European Union (EU), companies now face a new concern when it comes to their energy supply. Aberdeen is set to be the worst-affected city because of Brexit according to reports, but what will happen to every city if the UK loses its place within Europe’s Internal Energy Market (IEM)?
Over the years, the UK’s main cities have become more reliant on energy imports from other countries, such as Norway, France, The Netherlands and Ireland, as well as other European partners. 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.
Despite a promise from the government to deliver a ‘green Brexit,’ some experts are concerned that the environmental implications could be serious. 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.
While we wait with baited breath to find out the final outcome of the Brexit agreements, gas mains suppliers Flogas Energy, look at what it could mean for the UK’s energy infrastructure, and how businesses can best prepare to futureproof their energy supply.
What is the Internal Energy Market (IEM)?
Founded in 1996 to facilitate energy trading between EU states, the IEM 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.
It is the IEM who is also responsible for tax and pricing policies, as well as setting (and implementing) norms and standards to make sure the environment and public’s safety are secure.
What does the IEM do for businesses?
The IEM’s ultimate goal is to protect the rights of all customers – individuals and businesses – and to tackle energy poverty by ensuring the availability of affordable gas 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?
In short, Brexit could mean that keeping the lights (and the heat) on could become trickier and more expensive for businesses. 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?
Over the past 10 years, the member states in the EU have worked extremely hard to shift 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 may no longer be able to rely on other member states from April 2019 to help keep the lights on if it experiences a problem 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 shows it’s imperative for UK businesses to start shopping the market now if they are to secure the best post-Brexit energy deals. 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.