Insights
Our partners Bionic are Business Energy experts, and they’ve looked at why energy bills are set to soar after Brexit, and what you can do to protect your pocket.
The UK is scheduled to leave the EU at 11pm on the 31st January 2020. Whether you’re a Remainer or a Brexiter, the economic and financial implications of the UK leaving the EU will have significant effects on your business. An independent United Kingdom will face changes to trade agreements and regulations, which are likely to influence your current supply chain and workforce. Furthermore, potential increases to the running costs of your business will impact your bottom line, and energy looks like an overhead that is certain to soar following our departure from the EU. Energy Experts Bionic believe that the following factors are highly likely to lead to an increase in your business energy costs:
Reliance on European Resources
The UK imports almost half (40%) of our gas supply and around 6% of our electricity from mainland Europe. So, if the Brexit transition is managed poorly, we face potential energy shortages and increased gas and electricity charges. This may prove particularly challenging during cold weather conditions that affect all of Europe, as EU countries may restrict our supply to prioritise their own citizens.
Increased Energy Transportation Costs
We currently import our energy from the four subsea pipelines that connect the UK to Europe, which are scheduled to increase by another 11 pipelines being constructed by 2022. Despite leaving the European Union, we will continue to depend upon imported European energy and remain subject to the EU’s internal energy market, yet we will no longer be in a decision-making position. This may lead to the UK being subjected to increased transportation costs and subsequent higher energy premiums.
Environmental Impact
Extreme weather conditions or power infrastructure suffering technical problems are likely to put energy supplies at risk. The UK relies on the subsea cables to balance energy supplies and to guarantee supply in lieu of wind and solar power. Disruption to this could result in power outages, higher costs and could even affect the EU’s climate change policy and efforts to combat global warming.
Energy Market Uncertainty
At present, the EU Emission Trading System (EU ETS) enforces EU-wide caps and trade systems which price carbon through emission permit trading. When the UK leaves the EU and the EU ETS, it’s not clear what carbon pricing mechanism will replace it, causing market uncertainty around how our exposure to carbon costs will be defined during this period.
Protect your pocket against post-Brexit bill increases with Bionic
As the Brexit deadline comes ever closer, the likelihood that your business energy costs will increase when the UK leaves the EU seems certain. Bionic’s Energy Experts believe that the best way to avoid price increases is to switch your energy supplier and tie your business into a fixed-rate deal. Their dedicated team are on hand to help SafeContractor members find the best energy rates available – cutting costs by as much as £1,027* a year. To see how much your business could save, find out more about our partnership with Bionic and why we believe that they can help SafeContractor members save up to £3,000 a year on their business essentials.
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