Will Brexit make it harder to keep the lights on in Britain?
20th March 2018 | Commercial Energy
To look at how EU membership has affected UK energy policy, and how Brexit could change this, we’ve decided to turn to Clive Moffatt, one of the leading experts on the economics of the sector. Moffatt is head of consultancy and market research at Moffatt Associates, and has advised everyone from HSBC and GE to the EU Commission on energy. He currently heads up a coalition of UK energy companies that want to raise awareness of the looming problems.
The popular perception is that Brussels has always imposed regulation over the heads of an unwilling UK government. But this was not always the case. In the 1980s and 90s, “the UK energy market was regarded as the model for the rest of the EU”, says Moffatt. For example, Britain “led the way on de-nationalisation, the removal of price controls, the establishment of an independent transmission network the launch of retail supply competition and the creation of an independent industry Regulator.” However, member states “have been reluctant to let energy policy slip from their grasp” so “the vision of a single energy market is very unlikely to be realised”.
Over the past two decades, European policy has shifted from liberalisation to focusing on cutting carbon emissions. In pursuit of these targets, “member states have often pursued individual and often conflicting policies such that across the EU, market have ceased to function”. Meanwhile, “a myriad of subsidies and penalties has led to a huge hike in energy costs for all consumers.”
Indeed, Moffatt thinks that the “ambitious” targets to cut CO2 emissions by 80% from 1990 levels by 2050 that were agreed by all EU governments in 2008, “may need to be postponed and much greater emphasis placed on ensuring security of supply and minimising the cost”.
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