As March 29th 2019 approaches there is a sense of uncertainty in the air surrounding everything post-brexit, but what will this mean for your energy bills?
Whether your energy supplier is one of the big six or a smaller supplier, brexit will have an impact, but the big question is will it be beneficial or negative, and by how much?
The average household energy bill in the UK for 2016 was £1,066. According to Ofgem the average household energy bill as of April 2018 was £1,138 per annum, a £72 (6.75%) increase from 2016.
UK Energy Policy
To understand how your energy bill may change post-brexit, it is important to understand the UK's energy policy and how it may change after the 29th March 2019. The EU sets standards to stop member states from polluting Europe's environment, with each state being able to choose its energy supply withing those standards.
An example of how member states determine their domestic energy policy with a different approach, would be comparing Germany to the UK.
Germany are making large efforts to remove nuclear power from their policy, whereas the UK are reviving nuclear power by constructing the first new nuclear power station in the UK in over 20 years.
UK Energy Improvements
A portion of our energy bills currently goes towards funding energy improvements, some may be scrapped due to Brexit, but not all. With some improvement schemes being scrapped the part of your bill that goes towards these improvements will be decreased, saving you money.
The energy improvements that continue will create new business for the UK economy.
Construction and operation of the UK's new nuclear power plant (Hinkley Point C) will create 25,000 employment, up to 1,000 apprenticeships and 64% of the project's construction value is predicted to go to UK companies. Hinkley Point C will be a major contribution to the UK's move to reduct carbon emissions. The electricity generated by its two EPR reactors will offset 9 million tonnes of carbon dioxide emissions a year.
The Big Six
According to which.co.uk this is what the big six had to say on energy bills and Brexit:
- British Gas parent company Centrica said it was focused on ‘delivering’ for customers and shareholders, understanding the impact on energy regulations and markets, and helping the government reach ‘the best possible outcome for energy’. It also said: ‘The UK is a major energy importer and what happens in the EU energy market will ultimately impact UK consumers.’
- EDF Energy said it was too early to gauge the impact of Brexit on the energy sector. It said that it would continue to concentrate on serving customers and ‘running power stations safely and reliably’. It added that the sterling slump ‘has led to higher costs for imported coal and gas, which in turn impacts UK energy wholesale prices’. It hopes that we maintain an ‘outward-looking economy’ and continue to champion climate change action, to trade energy across borders, and to support investment in infrastructure, research and development.
- Eon said ‘the consequences of Brexit will be manageable due to the way we run our business within the UK’. It added that, as a ‘truly international organisation’, it sees cross-border co-operation as ‘beneficial’.
- Scottish Power said that it ‘respected’ the referendum result and was committed to prioritising customers, maintaining UK investments, upgrading its networks and constructing renewable energy generation.
- SSE didn’t believe that its customer service or investments were threatened by the vote to leave the EU. It said that the ‘challenge’ would be ensuring that any changes to the EU/UK energy relationship were ‘consistent with providing reliable and affordable energy’.
- Npower said it was unable to comment.
The overall tone and view of the big six is that there is nothing to be worried about regarding Brexit and your energy bills, however it is important to nose that the big six will be less affected by Brxit than smaller suppliers to absorb fluctuating wholesale prices and exchange rates.