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The energy aspect of the Referendum
Odgers Interim recently co-hosted an EU referendum debate for senior energy sector executives alongside Addleshaw Goddard. Led by the BBC’s Business Editor Simon Jack, the question-time style debate featured a panel of industry experts including Matthew Pennycook MP, Dipesh Shah OBE, Paul Massara, Government Energy Advisor, and Guy Winter, a Partner and energy specialist at Addleshaw Goddard.
Make or break?
The overriding message within the lively conversation was that while energy should be a factor in the UK’s EU decision, it is unlikely to have major implications on the sector as a whole. While Amber Rudd MP’s alarmist speech from earlier this year has left tracks, the views of the panel largely challenged her notion that Brexit would serve an ‘electric shock' to the UK energy market, and that it would lead to a soar in energy prices.
There was no dispute that the key considerations for Brexit and the energy market are impact on bills, renewable targets, and the European energy market, but the extent of the effect was a point of speculation.
Addleshaw Goddard helped to navigate the legislative elements of the debate, confirming that as the EU’s climate change act is enshrined in UK legislation, the direction of travel is well set, independent of whether we are or are not part of the internal energy market. Additionally, because the UK Government has been at the forefront of efforts to liberalise and develop cross-border energy markets, this policy direction is likely to continue and interconnection is a given.
In terms of renewables, little impact was also predicted as the UK Government has agreed to phase out coal by 2025, though Brexit could result in more flexibility in approaching targets. Getting renewables off the ground is a priority for many of our clients at Odgers, and this was echoed by voices within the debate that believe it has the potential to bring vast and diverse employment opportunities to the UK.
The trilemma of balancing energy security, social impact and environmental sensitivity was crucial throughout, and is of constant interest to most clients in the sector. This event showed, and speaking with others within the industry has confirmed, that security of supply can be a concern, but this is a factor whether we are in or out of the EU.
Most in the sector seem to agree that the biggest issue facing the energy and utilities sector is investor confidence, particularly pertinent as the UK is undertaking a historic level of investment in energy infrastructure. With a few weeks to go, no matter the result, all eyes will be on the impact on investor appetite and confidence to support major energy projects in the UK.
Categories: Energy, Manufacturing & Infrastructure