Securing a competitive and reliable energy deal is important when it comes to running a business. Ultimately, it will enable you to keep your overheads low and allow your business to run as an effective and profitable outlet.
However, with an imminent deadline in place for the UK to leave the European Union (EU), companies now face a new concern when it comes to their energy supply. What will happen if the UK loses its place within Europe’s Internal Energy Market (IEM)?
In years gone by, the UK has become increasingly reliant on the energy imports of other countries, including France, Norway, Ireland, The Netherlands and 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.
Some experts believe that, despite the government’s promise to deliver a ‘green Brexit,’ there will be serious environmental implications. 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 for the final Brexit agreements to be announced, gas installation specialists, Flogas Energy, look at what the deal could mean for the United Kingdom’s energy infrastructure, and how to best prepare to futureproof your business’s energy supply.
What is the Internal Energy Market (IEM)?
Founded in 1996, the IEM was set up to facilitate energy trading between states in the EU. It 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.
The IEM is also responsible setting and implementing standards, taxes and pricing policies to guarantee the protection of the environment and the public’s safety.
What does the IEM do for businesses?
The ultimate goal of the IEM is to help protect customers’ rights. This could be individuals or businesses and helps tackle energy poverty by guaranteeing 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 means that leaving the lights and heat on in your business may become trickier, and a lot more expensive. 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?
In the last 10 years, the EU member states have tirelessly worked together to try to shift towards a cleaner energy supply. 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?
Once March 2019 has come and gone, the UK may no longer be able to rely on other member states in its bid to stay lit up if it has a problem with its 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.
Against this backdrop, it’s crucial for UK businesses to shop the market now 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.