Energy costs will rise by up to £500m a year if the UK votes to leave the European Union, according to a report commissioned by National Grid.
The report by Vivid Economics found the impact of the UK being excluded from the EU’s Internal Energy Market could be up to £0.5bn per annum in the 2020s due to fewer interconnectors such as the planned FABLink, IFA2 and Viking Link being built.
Further impacts on the investment climate for energy assets could exacerbate the problem by up to several hundred millions of pounds, it warned.
“Most of these impacts could be effectively mitigated if the UK is allowed to remain in the IEM, although there would be a loss of influence over policy design which has not been quantified in this analysis,” it said.
Energy secretary Amber Rudd will today say in a speech at a Kent interconnector site that Brexit would result in a “massive electric shock”.
“However you look at it, an internal energy market helps to guarantee our energy security, which is the bedrock of our economic security,” she will say. “I’m not willing to play fast and loose with either”.
Rudd will also highlight the economic benefits of the UK remaining in the EU in terms of energy investment and jobs.
“Being in the EU helps us attract billions and billions of pounds of investment in our energy system and supply chain. Taken together, this investment helps support 660,000 jobs in the UK’s energy sector.”
Image: Amber Rudd (DECC)
