The Use of the utility bill of their business

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Electricity targeted

While waiting for the vote, uncertainty advocates and induces the capital increase as well as the freezing of projects. As the risks are greater, investors demand more collateral but also higher returns. And because it requires the immobilization of important capital, the energy sector is particularly affected. More specifically, that of electricity presents itself as one of the first targets. The replacement of aging plants requires significant investments. This also applies when it comes to the development of interconnections with the continent. The exit from the United Kingdom would result in a higher cost of British electricity. The offshore wind or nuclear sector would also be the most affected. Another element to consider is the fact that Great Britain is dependent on electricity exchanges with neighboring European countries. This share represents almost 20 TWh per year, in other words, more than 5.5% of its consumption.

Gas and oil: a relatively small impact

utility bill of their business

With regard to the production of gas and oil in Great Britain, this represents, for each of them, only 1% of that of the world. The impact on this side should, therefore, be less. Almost 50% of the gas consumed by Great Britain is indeed produced by the country.

The imminent exit from the EU and the single electricity market inevitably presents risks for an already fragile network: the country was the victim of a giant blackout in August. Rising invoices, weakening of the supply, brakes on the energy transition: Brexit, which will be effective from Friday, could disrupt the electricity market in the United Kingdom.

Will the current pass?

Great Britain is largely dependent on the EU for its supply: its own electricity production fell in 2018 by 1.6% according to the latest available statistics, in particular, because of the gradual shutdown of coal-fired power plants not yet fully compensated by the rise of wind power. The forthcoming exit from the EU and the single electricity market therefore inevitably presents risks for an already fragile network: the country was the victim of a giant blackout in August. It is also not clear that electricity is part of the negotiations this year with Brussels and the case of the sector could be postponed. The British authorities assure that alternative commercial arrangements will have to be put in place, without further details.

As in other areas such as finance, it will, therefore, be necessary to obtain equivalences to be able to export or import electricity, in particular by agreeing on CO2 emission rules for example, so that countries who produce cleaner and more expensive are not disadvantaged. British electricity authorities say that even if trade talks fail, there will be no interruption in the flow of electricity and gas.

But in the event of a non-agreement at the end of trade negotiations at the end of 2020, the EU could give preference to its member countries in the event of a peak in demand, during heat waves or very cold weather.

Salted invoices

Uncertainty about equivalences, the possible return of quotas or customs duties in the scenario of a failure of trade negotiations: electricity exchanges with Europe could become more expensive, with the possibility of more expensive bills for consumers.