As you’re no doubt hearing all the time, 2016 was a momentous year that rocked the boat in some very dramatic ways. The UK’s energy industry is among those still feeling the waves, so this week we’re taking a look at how two of last year’s biggest surprises could affect our sector.
In some ways, you can’t say that incoming American president Donald Trump hasn’t been forthcoming when talking about his energy policies. Promising to usher in a new age of American energy revolution, he’s pledged to lift the restrictions and regulations put in place by the Obama Administration, paving the way for companies to access new reserves of oil, natural gas, coal and an estimated $50 million worth of shale. Essentially, a lot of his policies make it cheaper and easier for companies to pull resources from the ground – as opposed to Clinton’s, who probably would have continued in the direction that Obama set. Trump also hasn’t been shy about his support for the oil and gas sector, and indeed there are several former or current oil executives sitting on his cabinet. He’s promised to save the coal industry and revitalise fossil fuels, which are likely to have wide ranging implications for the international market.
However, it’s not political directives which have been killing the coal industry, but rather cheap natural gas coupled with rapid advancements in the renewables sector. Though President Trump derides wind and solar energy, there’s no denying their advantages for businesses and homeowners, and what’s more, the global market is still likely to maintain a degree of independence; the bottom line is that the direction of oil and gas prices will have a greater impact on the markets than his energy policies, whatever they end up being. Though fossil fuels will undoubtedly see a spike, it’s far from the end for cleaner energy, and there’s no denying the global march towards green initiatives.
The surprise referendum result in June gave a shock to many industries, which is being most keenly felt in the financial markets. The fall in the pound against other currencies like the euro means that costs of power, gas and oil will likely increase in the short term. It will also have an impact on investment – in order to continue to meet its current targets, Britain needs £19 billion of investment every year between now and 2020. Most of that comes from foreign investors, who are famously averse to economic uncertainty, so the current climate will deter them until things settle down. As of yet, no one quite knows when that might be.
But that’s the bad news out of the way! Despite things not looking great for our wallets in the short term, the good news is that Brexit won’t seriously affect the UK’s climate change policies. We’ve already gone further than anyone else when it comes to reducing carbon emissions, and so far we’re on track to bringing them down to zero by 2050. Almost a decade ago our Climate Change Act was passed unilaterally by a cross-party vote, and ministers have made a point of saying it’s unaffected by Brexit.
Although there are some quite scary changes for the energy industry in the short term, many experts are predicting that things will level out once the initial shock has worn off. In Trump’s case it means waiting to see exactly what his policies are, and whether they’ll have any effect, whereas in the case of Brexit things will be a lot clearer once the markets settle down. In the meantime, neither are looking like they’ll present serious threats to either the UK or global renewable energy sector.
This is great news for you, too! Feel free to continue browsing our range of solar panels for the advantages they’ll bring to your business, or have a look at our case studies to see how people have already benefitted from our products and expertise.
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