Brexit and UK’s Renewable Energy; I

With less than a month to go for the 23rd June referendum on British membership of the EU, experts have looked at the impact on each industry if “Leave” gains majority.

Having been recently introduced to the British economy, its way of working and the views of the people, I am still not an expert on this subject.

On one end is the EU’s  Renewable Energy Directive (RED) that the UK follows and which is one of the drivers of renewable energy in the UK. RED establishes an overall policy for the production and promotion of energy from renewable sources in the EU. It requires the EU to fulfill at least 20% of its total energy needs with renewables by 2020 – to be achieved through the attainment of individual national targets. All EU countries also need to ensure that at least 10% of their transport fuels come from renewable sources by 2020.

In 2014, the EU also decided on a further package of green targets covering the period to 2030. But instead ended up agreeing to a target for cutting carbon emissions across the continent by atleast 40% from 1990 levels by 2030. That 2030 target is divided up through a process of ‘burden-sharing’ into targets for each member state – but each country has the freedom to choose how it goes about meeting the targets.

The RED is one of the reasons why the UK Government has backed the rapid expansion of renewable power sources. In 2010, just 7 % of UK electricity came from renewable sources; but that has risen to more than 23% now. According to DECC, the country is on track to reach 30 % by 2020.

At the same time, currently the renewable energy industry in UK is at an all-time low. The UK routinely topped the annual league table for attractiveness to clean energy companies, run by Ernst & Young (EY), in the mid-2000s. For the first time in May 2016, however, it has slid to 13th in the global rankings.

The E&Y report says that investors in renewable energy are being put off the UK by political posturing hostile to renewables and green efforts and the slashing of government support for clean power supplies, in favor of potentially more expensive alternatives such as shale gas and nuclear power. Renewable energy investment and thousands of jobs, is likely to be lost by the UK.

Taking into account the long gestation period of renewable energy power plants, I believe UK would already approved/planned for projects to meet the 2020 targets.

Leaving the EU, would mean that the industry will be driven mostly by UK’s Climate Change Act which established a framework to develop an economically credible emissions reduction path. The act commits the UK to reducing emissions by at least 80% in 2050 from 1990 levels. The Act also required the Government to set legally binding ‘carbon budgets’. A carbon budget is a cap on the amount of greenhouse gases emitted in the UK over a five-year period.

Another driver for renewable energy in the country could be the INDC from UK resulting from the Dec 2015 Paris COP21 Meet. But the INDC targets/roadmap will ideally be included Climate Change Act with amendments; if needed.

But this may mean more focus on the carbon emissions rather than on renewables.



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1 Response to Brexit and UK’s Renewable Energy; I

  1. praveen kulkarni says:

    Whether Brexit or not, the Panama leaks will throw lot of questions on the sustainable and transparent London based Investment activities under radar and rightly so. The climate change action plans and INDC are all proxy economic war by US and Europe and it will be exposed in due course and accordingly all the false promises or targets made by many nations, will get corrected. London based Investment shall be put to corruption money route test including British Virgin Islands etc, which defines the Renewable Energy targets of many countries. Hope G7 and G20 will take note of such round trip money, which is not clean, so, how clean Energy targets will be met!?


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