UK’s Energy Prices After Brexit

The entirety of the United Kingdom has already been subject to not only one but two rounds of price increases this year – namely, the rising gas costs and wholesale electricity.

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However, it seems that the UK’s bad luck is not over yet, as energy prices are currently experiencing increasing rates that were more or less expected by analysts and consumers alike.

Let’s take a closer look at the energy prices in the UK and how they are currently affected by upcoming Brexit.

European Influence

After the talks between the European commission president and the UK prime minister, it was believed that, with the help of some newly proposed interconnectors, the wholesale prices would decrease after Brexit.

Instead, as more than enough reports suggest, the imposing tariffs on energy trading that come with those interconnectors will, in fact, drive up energy bills in the following months.

Lastly, power companies have warned that the trade barriers imposed by Brexit will affect the importing costs of electricity and gas as well, causing overall increasing energy rates.

Global Warming Issue

On the other hand, Theresa May and Jean-Claude Juncker once said that the costs that the interconnectors come with are meant to set back the battle we currently fight against global warming.

However, it was mentioned that the costs would hit consumers in general. The result was that climate change issues and comprehensive energy were given a higher priority in the Brexit negotiations.

The Exact Difference

At the moment, the interconnectors in question account for roughly 6% of Britain’s power supply. The newly proposed connectors, however, would account for roughly 20%.

These interconnectors are considered useful mainly because they help to balance the energy supplies since they guarantee solar and wind power in places where these are not available.

It is believed that the cost implied by the installation of these interconnectors will only affect the consumer in the short term – as it is expected that the rising energy prices will make them pay for the rest.

Household bills are expected to rise as there’s proof of rising friction in energy trading between the EU and the UK. As mentioned above, the last thing that the consumers need right now is yet another price hike – after the two they have already experienced.

Price Increases in Effect

Naturally, the question is when will energy prices spike exactly. It is hard to determine when, mainly because a decision regarding the aforementioned interconnectors hasn’t been made yet.

On top of that, analysts don’t know for sure if and how the decision might affect the consumers. Government officials state that the UK has always been one of the leading countries in the world and that it will not lower its standards – but they reinforced the fact that climate change must still be tackled.

The Bottom Line

One thing is for sure – namely, energy prices will increase, more or less, after Brexit eventually happens. However, this is not something that consumers should be worried about.

Despite the increasing rates, there are still a lot of options you can rely on to lower your energy bill and, overall, adapt to the new conditions.