BREXIT creates uncertainty in the clean energy markets

Analysts say Brexit will create uncertainty for the energy sector which could hit the 20  billion pounds investment a year needed to replace aging, dirty power plants

Many green leaders had called on voters to oppose a British exit from the EU — or Brexit — arguing that the EU has raised environmental standards in the U.K. and the rest of Europe. They noted that environmental problems are international in nature, so international cooperation is necessary to fight them effectively.

But the overall, long-term impact the move will have on efforts to combat climate change, including the Paris Agreement reached last year, remains far from clear.

The UK will be able to keep its new carbon tax and ditch the ineffective EU Emissions Trading Scheme (ETS), which has been a relative loss for UK companies who have purchased more credits than they have sold. It will be freed from EU required “renewable energy” standards and able to establish a more comprehensive “clean energy” standard that is more aggressive while allowing a greater range of potential solutions that include nuclear energy as a major contributor to the targets.

It will eliminate the leverage that the EU provides to antinuclear members like Austria to challenge its “contract for difference” deals as illegal state aid.

The recent Brexit vote in the U.K. and the ongoing, boisterous American election campaign all heighten the importance of the talks between Prime Minister Justin Trudeau, Mexican President Enrique Pena Nieto and American President Barack Obama.

The Ottawa summit comes less than a week after Britain voted to leave the European Union, after more than four decades of membership.

Now, there are new concerns that the Brexit vote will delay ratification of the newly negotiated Comprehensive Economic and Trade

Agreement (CETA) between Ottawa and the EU. That deal is scheduled to take effect in 2017.

The increased European uncertainty makes securing better trade in North America seem increasingly important, Mexico’s Finance Minister Luis Videgaray said recently.

“One of the important issues, without doubt, is how to give a fresh impulse and greater value to North American integration,” Videgaray.

"We will be in a position… to release a comprehensive North American climate clean energy and environment partnership," Deese said on Monday. "We will announce a historic goal to achieve 50 percent clean power across North America by 2025."

The three leaders will discuss a range of trade, climate, security and economic issues, including how to coordinate efforts to insulate North America from the ramifications of Brexit.

At the moment, the U.K. has the world’s largest and most advanced offshore wind industry. Many of those projects are being funded by the EU and big utilities on the Continent, and the fate of those agreements is in doubt in a post-Brexit world. German industrial giant Siemens, which is building a massive manufacturing hub for wind turbines in Hull, was one of the most vocal opponents of Brexit.   

Perhaps most important, the outcome puts the development of a single, unified European energy market, known as the internal energy market, into doubt.

Will the ramifications of Brexit impact the progress that has been towards increasing clean energy usage and on the battle with climate change?  Let us know your thoughts.

Add new comment