The development of the UK wind market will be harder following Brexit, particularly during the two to three years of exit negotiations, according to Wind Europe.
The European wind energy association said Brexit brings political and policy uncertainty that will “cast a shadow over UK investments”.
It said Brexit is likely to raise the cost of capital and impact on project costs.
The UK parliament has said a +2% risk premium would increase the cost of financing offshore wind by £3bn a year, Wind Europe said.
Brexit will also impact policy, as will a new UK government in September, it added.
The trade body expects the new government will want to continue supporting offshore instead of onshore wind, but “how far they’ll apply EU energy policies is unclear at this stage”.
But, it said, “we can’t assume they’ll do everything independently of the EU. UK wholesale power prices are twice as high as most places in Europe, and they see the single EU electricity market, and expanded interconnectors, as a way of reducing them.”
Reserve margins will remain tight for some time and so the UK will continue to be a net importer of electricity. “Overall, Europe will matter to them on energy,” Wind Europe said.
In Europe itself, Wind Europe expects the balance of opinion on EU policy-making to shift in a negative direction overall.
“We will lose an ally on climate change, CO2 pricing and electricity markets – and on the single market, trade policy and financial services where the UK’s pragmatic, business-oriented approach usually worked in our favour.
“More broadly, the relative weight in the EU of Central and Eastern European countries will increase with Brexit.
“It’ll be harder for Brussels to do things without having a good number of these countries on board.”
Image: reNEWS
