Many people are concerned Brexit will mean higher energy bills, and rightly so.
Energy UK, the trade association for the British energy industry, has warned that an increasing number of Brexit-related energy issues could lead to higher household bills.
There are three main ways in which leaving the EU could push up energy bills in the UK:
- A cut in EU investment and increased transportation costs
- Leaving the EU Emission Trading System (EU ETS)
- Not having a replacement body for European Atomic Energy Community (Euratom)
A cut in EU investment and increased transportation costs
About 12% of the UK’s gas and 5% of its electricity comes from the EU. Interconnectors are pipes or wires that carry electricity or gas between countries. The UK has interconnectors with France, Belgium, The Netherlands and Ireland, while Northern Ireland has interconnectors with the Republic of Ireland and Scotland. Interconnectors linking the UK with Norway and Denmark are currently being built.
If the UK leaves the EU Internal Energy Market, trade by these interconnectors could be less efficient and more expensive. For the UK to continue to benefit from this set-up we’d need new trading agreements to govern cross-border electricity flows.
Leaving the EU Emission Trading System (EU ETS)
The UK is currently part of the EU Emission Trading System (EU ETS). This is an EU-wide system that puts a price on carbon through trading of emission permits. So far we don’t know what carbon pricing mechanism the UK will be in post-Brexit and this make it difficult to price any thermal generation, causing uncertainty across the market.
Not having a replacement body for Euratom
Euratom is the EU’s nuclear cooperation treaty, and we could be in trouble if the UK doesn’t put a replacement body in place. This could have major consequences for the UK’s nuclear industry.
Households can go some way to protecting themselves from increased energy bills by switching to a fixed tariff as soon as possible. This will give you protection for the length of the fix, which is normally one or two years.
It’s always advisable to shop around and switch energy suppliers on a regular basis – staying on your supplier’s standard variable rate will usually mean paying over the odds for your energy. Switching energy tariffs through MoneySuperMarket could save you at least £302*.
Switching supplier is easy to do and won’t require any rewiring or work outside your property. It usually takes up to 21 days for a full switch, which includes a two-week “cooling off” period, during
which you can choose to cancel the switch free of charge if you change your mind.
*10% of customers that applied to switch via MoneySuperMarket could save at least £302.05, November 2018.