Week in smart metering - Brexit and energy

What does Brexit mean for energy in UK, asks Claire Volkwyn, editor, Metering & Smart Energy International?
Published: Wed 29 Jun 2016

The biggest news to hit the political scene in recent years is the exit of the United Kingdom from the European Union. Brexit, as it is popularly known, appears to have taken many people by surprise and the number of ‘what happens if we leave the EU?’ queries on Google increased by 250% on the night of the vote.

The scientific community has long held the opinion that Brexit would be bad for scientific collaboration, with 83% of the scientists claiming to be against Brexit, fearing its impact on funding and collaborative research. 

In the aftermath of the vote, another question that has been raised repeatedly is ‘what does it mean for energy in the UK’?

That depends on who you ask… some people feel that the impact will be positive, with Boris Johnson and Michael Gove claiming that the impact on pricing should be positive, claiming "we’ll have more money to spend on our priorities, wages will be higher and fuel bills will be lower.” This, supposedly, through cutting VAT on fuel and power supplies.

On the other hand, there are those who warn that prices are likely to increase, that the falling pound could add an additional £4 billion in costs to an existing bill of nearly £21 billion on imported energy. PWC has warned of increased energy trading costs and difficulty in importing cheap power or selling excess power to Europe.

Vivid Economics has theorised that uncertainty around the pound and investor sentiment may make it more expensive to raise funding to maintain or expand infrastructure. National Grid seems to agree, saying just before the vote, “We commissioned independent research to evaluate the effect of Brexit which indicates that there is value to UK consumers from remaining a fully engaged participant in the IEM (European market mechanisms).

“National Grid believes that remaining in the EU is the lowest-risk way for the UK to continue to benefit from lower consumer bills and create greater energy security,” said a Grid spokesperson.

There is, of course, no sure answer to what the next months or even years are going to look like, or if a post-Brexit UK will be better or worse off in the long run.  For the short term, however, it is unlikely that any major impacts or earth shattering announcements are going to be made regarding the energy sector.  As always though, we’ll be keeping our eye on developments and sharing them with our readers.

Have an opinion on what Brexit means for the UK or for the EU?  We’d love to hear what you think.

More from Metering & Smart Energy International

The pound has plummeted to its lowest level in 3 decades as the results of the EU referendum were released. We look at how 'Brexit' could impact the smart energy sector. The decision impacts the country's adherence to or independence from regulations including smart energy, writes Rose Bundock, Digital Content Head at Metering & Smart Energy International. [How will Brexit impact UK’s energy sector?]. In an editorial analysing the impact of Brexit on the energy sector, UK law firm Simmons and Simmons has highlighted the volume of Europe's investment into UK projects.

First Utility has chosen utility metering services provider Smart Metering Systems (SMS) as its preferred domestic smart meter asset provider. Under the agreement, SMS will provide first utility with domestic smart meters under the UK smart meter rollout programme, which is overseen by the Department of Energy and Climate Change (DECC). [First Utility selects SMS for domestic smart meter rollout]

With the global total base of installed smart meters expected to reach 780 million units by 2020, Europe is expected to be the world’s second largest market. ABI Research predicts that the deployment of the new metering system by EU member states will have a positive impact on the worldwide installed base by 2020. [Trends in Belgium’s smart meter landscape]. Adarsh Krishnan, Senior analyst at ABI Research said: “The region will overtake North America, where mass roll-outs by large utilities peaked already in 2012.”

According to a new report by Navigant Research, advanced meter infrastructure (AMI) deployments in North America have plateaued. Michael Kelly, research associate with Navigant Research said: “While there has been a decline in the rate of AMI project deployments across North America, one notable exception comes from Con Edison and Orange & Rockland Utilities." [AMI deployments in North America are declining – report]. A company release notes that between 2009 and 2012, the US Department of Energy’s Smart Grid Investment Grant Programme had largely contributed to a rise in smart meter installations across the country.