Electricity in the UK is, at this very moment, quite an important topic!
It is uncertain how the post-Brexit electricity prices will look, but people are more afraid about the certainty that they will see a major increase in prices.
Why are they so sure about a major increase? Well, mainly due to the Yellowhammer documents that have been published some months ago by the government. They warn people about significant electricity price increases, especially for consumers.
However, commercial prices are set to rise as well, given that the potential new tariffs that the UK will be subject to affect both the import and export of electricity.
The Impact of a No-Deal Brexit
The six-page document that the government released stated that a no-deal Brexit scenario will affect food supplies, civil disorder, delays at the border, fuel disruption, and – obviously – rising electricity prices.
Even though the document points out that there will be no shortage of electricity, nor an instantaneous increase in prices, they do acknowledge that electricity prices will see significant increases for all types of consumers.
On top of that, it is said that the increase will also have wide political and economic impacts. It is rumored that some participants could even exit the market!
The Warnings of Operation Yellowhammer
If we are to take a look at the things that may happen after a no-deal Brexit, the scenario is pretty similar to the one of a post-apocalyptic movie.
For example, the UK may experience severe extended delays to medicine supplies, disruption to fuel supplies, protests and public disorder, lack of clean water, fishing wars between the EU and UK vessels, as well as supermarket price rises.
Naturally, these are all temporary – which is the main reason why people don’t pay too much attention to them. However, the biggest and worst thing on that list of warnings is the significant electricity price rises mentioned.
This is because people know that the rise will be here to stay for quite some time.
Why Will the Price of Electricity Rise?
As you may know, the UK is currently importing and exporting energy via a system of interconnectors owned by the European Union. As a member of the EU, the UK is currently not paying anything to use that system.
However, this will change once a no-deal Brexit occurs.
Reportedly, the EU will add tariffs and tax the UK for the use of the interconnector system. The bad part is that, in order to keep up with the electricity demand, the UK had planned to install eight more connectors by 2020.
This means more taxes/ tariffs for the UK and, inherently, higher utility bills for both domestic and business consumers.
The Bottom Line
Long story short, electricity prices are set to rise after Brexit – or after the transition period ends in case of a Brexit deal.
However, most people believe that the UK will not enjoy a Brexit deal and that, sooner or later, the country will have to deal with the issues mentioned above. On top of that, it is known that the issue of electricity prices will be a long term one – and it reportedly made some people ask themselves whether they’ll be able to keep their lights on post-Brexit!