Report: Energy sector experiencing 'negative impacts' of Brexit vote
The majority of energy efficiency suppliers fear that it is a matter of time before consumers are subject to rising prices leading to a slowdown in investment, with suppliers already claiming that the Brexit vote is negatively impacting the sector.
That is the overarching view from the latest UK Energy Efficiency Trends report, released today (13 September) by energy verification specialists EEVS and Bloomberg New Energy Finance (BNEF). The report reveals that 56% of the 89 UK organisations and suppliers that were questioned believe that the impending decision to leave the European Union (EU) is already creating negative impacts for their business.
EEVS’ director Ian Jeffries said: "Last quarter's survey results were clear on the Brexit issue; respondents felt strongly that the energy efficiency sector would be best served if the UK remained in the EU. With the UK electorate having taken the contrary view, we're now seeing what that means for our sector, in the short term at least.
"Perhaps unsurprisingly, respondents were uncertain about what the real, longer-term outcome would be. But one thing that they are clear about is that in the short term it looks pretty bleak, with many expressing concern around how it will impact energy saving activities and investments, whether it be a cooling off of customer demand for suppliers, or higher technology and installation costs for consumers.”
The results for the second quarter of 2016 revealed that just one-third of respondents were operating under a “business as usual” approach since the Brexit vote. In contrast, 73% of consumers feel that the energy efficiency sector had remained “business as usual” following the referendum, but a quarter did report either minor or major impacts on future investment plans.
In regards to future trends, half of suppliers now believe that consumer demand will fall over the next 12 months, mainly due to price increases and cuts to businesses and investment. In total, 55% of consumers are anticipating an increase in energy costs, with 32% expecting an increase in energy efficiency technology costs.
In order to placate the concerns outlined in the report, the respondents have called for political, economic and business certainty to be “restored quickly” in order to reverse the expected downturn. Consumers have called for the UK Government to focus on energy security and accelerating efficiency measures.
In total, six out of 10 suppliers want all energy-related regulations deriving from the EU to be retained in full, with just 3% calling on all regulation to be removed from the UK statute book.
While green groups and businesses are worried that energy and environmental policies could be eroded by the Brexit vote, ex-energy minister Andrea Leadsom attempted to ease concerns, claiming that energy policies wouldn’t change after the referendum.
The chairman of Bloomberg New Energy Finance (BNEF) has also downplayed the potential impacts of leaving the EU, claiming that investor confidence on energy efficiency measures was already suffering due to a lack of clarity over energy policy.