UK supply chain could be damaged by Brexit

Brexit is likely to have significantly detrimental impacts to the UK’s energy supply chain, a member of the House of Lords’ EU Energy and Environment Sub-Committee has warned.

Speaking at today’s ‘Brexit and the UK Energy Sector’ event in central London, Viscount Hanworth described the potential effects of Brexit on the country’s energy industry as both “injurious” and “incomparable”.

In particular he warned of the potential for Brexit to discourage investment in UK generating capacity and continental interconnectors, factors which he said would result in a “massive deficit” of generating capacity. Furthermore, Hanworth said that demand management or energy efficiency would “hardly serve to mitigate” the level of generating deficit that could arise. 

Hanworth said projects currently underway could fall by the wayside if Brexit negotiations proved troublesome, with Hinkley Point C identified as particularly perilous. 

The UK’s current position of leaving Europe’s nuclear energy market Euratom also attracted the ire of Hanworth, who said the decision was “quite unfathomable and incomprehensible”.

“But there will also be problems arising throughout the supply chain, including the difficulties of obtaining the necessary skilled labour. It’s likely that if we pursue our hard Brexit agenda then we will have to cede our membership of the Internal Energy Market and the resulting impediments to the trading electricity will result in losses quantified at hundreds of millions of pounds per annum,” Hanworth said. 

These words echo those of a panel of MPs who spoke recently about the impact of Brexit on the UK's continued membership of the IEM, with Conservative James Heappey pointing out that leaving the single market meant automatic continuation of the IEM "is off the table."

Hanworth’s comments are given greater context by the government’s own Clean Growth Strategy - the document outlining how the country intends to meet its fourth and fifth carbon budgets - which heaped importance on interconnectors within the UK’s decarbonisation efforts. 

The government expects as much as 18GW of interconnector capacity to be operational by 2030, prompting the Committee on Climate Change to warn earlier this year that any shortfall against that target would have to be met with additional renewable capacity.

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