The Renewables Consulting Group (RCG) today launched a multi-client study to analyse the possible implications of a Brexit on the UK’s future offshore renewables and environmental legislation.
Whilst estimates suggest UK level regulation is 2.5 times more cost effective than EU regulation, a Brexit scenario is expected to leave the UK with little influence over EU energy regulation but still be largely regulated by it. Yet, the evidence predicts regulatory divergence will grow over time leaving the offshore wind supply chain less competitive against their European counterparts.
Dr. Steve Freeman, Head of the Public Sector practice at RCG and the principal investigator for the report commented: “Today, the offshore wind industry is estimated to contribute over £1 billion to the UK economy; a figure predicted to grow significantly by 2020. Our research shows a Brexit is likely to put UK’s 2020 and 2030 renewables targets under threat, and with it further uncertainty on the future sustainability of the industry.”
Whilst the full impact of a ‘Brexit’ is difficult to predict, it is well understood that energy and the environment are key pillars of EU legislation, and have, over time, intricately bolstered every facet of UK energy law and policy. If Britain exits, Government needs to maintain close cooperation and policy alignment with the EU to leverage its competitive edge and retain its current influence as a market leader in marine renewables, and energy policy innovator. The alternatives are exploitation of its new institutional freedom to reverse key energy and environmental laws and policies, which has far reaching implications to all actors in the renewables sector.
Freeman continued to say: “Eurosceptics argue that the EU sets overambitious environmental and climate targets with inflexible energy policies that burden UK industries. Yet, despite the rhetoric, the evidence to remain in the EU shows that energy policy, climate and environmental regulation remain fundamental drivers to future growth, and without them the renewables industry will be at risk from regulatory divergence.”
With no precedent set for Member States to leave, failure to understand the implications of a Brexit on the offshore wind industry and nascent marine renewables sector (wave and tidal power) could be a costly one. The seemingly simple decision to ‘leave’ or ‘stay’ is a complex one and finding its answers opaque. With time running out, the implications of a Brexit to the future of the offshore wind industry and marine renewables, and its supporting environmental legislation, hangs in the balance.
The report entitled “Judgement Day” will be delivered by the end of April, and presents a balanced review of the current state of play, the successes and failures of EU energy policy in relation to offshore renewables, as well on the pros and cons of leaving or staying. For further information, please visit: www.renewablescg.com/what_we_think