Failure to understand the implications of Britain leaving the European Union on the country's offshore wind and nascent wave and tidal industries could be costly, Renewables Consulting Group (RCG) has warned as it is preparing to deliver a study on the effects of the so-called Brexit on UK's offshore renewables industry.
Whilst estimates suggest UK level regulation is 2.5 times more cost effective than EU regulation, a Brexit scenario is expected to leave the UK with little influence over EU energy regulation but still be largely regulated by it, according to RCG.
The evidence predicts regulatory divergence will grow over time leaving the offshore wind supply chain less competitive against their European counterparts.
If Britain exits, the UK government needs to maintain close cooperation and policy alignment with the EU to leverage its competitive edge and retain its current influence as a market leader in marine renewables, and energy policy innovator, RCG says. The alternatives are exploitation of its new institutional freedom to reverse key energy and environmental laws and policies, which has far reaching implications to all actors in the renewables sector.
Today, the offshore wind industry is estimated to contribute over GBP 1 billion to the UK economy, a figure predicted to grow significantly by 2020.
RCG's research shows a Brexit is likely to put UK’s 2020 and 2030 renewables targets under threat, and with it further uncertainty on the future sustainability of the industry.
Whilst the full impact of a Brexit is difficult to predict, it is well understood that energy and the environment are key pillars of EU legislation, and have, over time, intricately bolstered every facet of UK energy law and policy, RCG argues.
Eurosceptics argue that the EU sets overambitious environmental and climate targets with inflexible energy policies that burden UK industries. Yet, despite the rhetoric, the evidence to remain in the EU shows that energy policy, climate and environmental regulation remain fundamental drivers to future growth, and without them the renewables industry will continue to be at risk from regulatory divergence.
The seemingly simple decision to ‘leave’ or ‘stay’ is a complex one and finding its answers opaque. With time running out, the implications of a Brexit to the future of the offshore wind industry and marine renewables, and its supporting environmental legislation, hangs in the balance, according to RCG.
The study, titled Judgement day: What are the implications of a Brexit on the UK’s future offshore renewables industries and environmental legislation?, is expected to be delivered by 30 April 2016.