Europe’s power sector players have begun to take stock after Britain’s 52-48 per cent vote to leave the EU, or ‘Brexit’, was announced this morning.
An E.ON UK spokesman said: “The UK EU referendum was always a matter solely for the voters and they have now spoken. It is expected there will now be a period of negotiation led by the UK government and during this time and beyond our focus will remain on our customers.”
On Friday E.ON said a Brexit vote would be “manageable” for the firm given the local nature of its British business. Also on Friday, RWE head Peter Terium said much the same thing in a statement, noting that he expects trade barriers resulting from a Brexit to only marginally affect his company’s installed base of 9894 MW in the UK.
A statement from Siemens noted that the company “has always made it clear that this was a decision for the British people and their view must be respected.
“As a global business with significant, long-term investments in the UK and high local value creation, Siemens is not so much exposed to negative effects that we might see. Nevertheless, the government must now move swiftly to unify and agree the nature of the UK’s relationship with the EU and other trading partners, creating clear roadmaps to encourage future investment.
“Siemens remains committed to our business in the UK. We have been active in the UK for more than 170 years, with locations throughout the country. Today, we generate revenue of around €4bn ($4.4bn) and employ about 14,000 people. With 13 manufacturing sites, Siemens has a strong local footprint in the UK,” the company said.
EDF, which is slated to build the $25bn Hinkley Point C nuclear power plant in the UK, said the vote won’t affect its plans.
“We think that this vote has no impact on our strategy,” CEO Jean-Bernard Levy said on Friday. “The strategy for our British subsidiary is unchanged.”
However, the green energy sector was less sanguine. Martin Baxter, chief policy advisor for global sustainability professionals body IEMA, said the result “raises significant questions for businesses, professionals and the wider public on environmental protection policy.
“In the lead-up to the referendum, IEMA members were overwhelmingly of the view that being a member of the EU is good for business and good for the environment,” he added. “There was a real concern that environment and climate policy risked being watered down if the vote was to leave. Environment and sustainability professionals will now look to the future with some sense of uncertainty.
“It is therefore essential that the government gives a commitment that, in negotiating the terms of the UK’s exit from the EU, an equivalent or enhanced level of environmental protection and climate policy will be implemented here in the UK,” he warned.
And Nina Skorupska, head of UK trade group the Renewable Energy Association (REA), said the decision “raises serious questions for investor certainty, energy security and much needed investment in the UK energy infrastructure”, adding that “the vast majority of our members had fears of Brexit, and we will be consulting with them and government in the coming weeks to set out a plan for continued low carbon energy investment, deployment and assurance of the 117,000 jobs in this sector.”
Analysts’ views echoed this concern about a future British energy mix. Tony Ward, EY’s Head of Power & Utilities, said the vote “will likely make its impact felt by creating an immediate heightened level of policy and regulatory uncertainty. Whatever government emerges in the aftermath of the leave vote it will need to clarify its policies with respect to climate change, renewable energy, technology preferences, State Aid and many other matters of direct relevance to the utility industry, and to its investors.
“In many respects, the UK has taken a lead in Europe when it comes to renewable and low carbon policies – the question as to whether support for low carbon technologies will be withdrawn, and whether other industries will be favoured, is a fundamental one,” he concluded.
Baxter also noted that while the UK is expected to be able to meet its power needs through its own installed base, the nation has “become increasingly dependent on the import of fuel and technology to construct and operate assets”, and that prices for these imports may rise.