The decision of the U.K. to leave the European Union could have far-reaching implications for the British renewables sector in terms of investment and legislation, according to recent research from the London-headquartered Renewables Consulting Group (RCG).
For most voters, says RCG, energy and environmental policies were not a priority when citizens considered which way to vote in the Brexit referendum. However, the consequences for the onshore and offshore wind industries and nascent marine renewables sector (wave and tidal power) could be considerable, the firm says.
RCG estimates suggest U.K.-level regulation is 2.5 times more cost-effective than EU regulation; however, Brexit may give the U.K. little influence over EU energy regulation but, at the same time, cause the country to be largely controlled by it. RCG predicts that regulatory divergence will grow over time and leave the offshore wind supply chain less competitive against their European counterparts.
Today, the offshore wind industry is estimated to contribute over 1 billion British pounds to the U.K. economy – a figure predicted to grow significantly by 2020, the firm says, adding that a Brexit is likely to put the U.K.’s 2020 and 2030 renewables targets under threat and bring future uncertainty on the future sustainability of the industry.
RCG says the coming period will be characterized by political and business uncertainty, both of which could shape the exit process; the composition of the government itself is in a state of flux following the resignation of Prime Minister David Cameron.
Though it will be some time before the full ramifications of Brexit are known, the firm concludes, renewable energy stakeholders must begin planning for the inevitable change.
To download RCG’s full insight, click here.