Frost & Sullivan on Brexit and the energy industry

Frost & Sullivan has outlined its expectations following the UK referendum result, stating that the most immediate effect in the energy sector will be the negative impact of an increase in petrol prices, due to a weaker pound. However, Frost & Sullivan argues, this is a result of a fluctuation in the relative value of the currency. With the Bank of England providing strong statements to intervene at a moment’s notice, this is not expected to a have sustained impact on the market.

The UK was already ahead of the rest of the EU on reducing its coal generation capacity and carbon emissions, with a commitment to close all coal plants by 2025. Frost and Sullivan states that there is no evidence to suggest that this will change.

The UK was unlikely to meet its 2020 renewable energy target, according to Frost & Sullivan.

Regarding energy prices, domestic fuel costs are unlikely to be significantly impacted the company predicts. The "pledge" by Vote Leave to eliminate VAT on fuel would only cause a 5% reduction if enacted.

For the environment sector, the European Union legislative framework has been crucial in shaping the industry in the UK. The EU directives on the waste recycling industry has a significant influence on the UK waste industry and the EU Circular Economy Directive standards would have required the UK to invest in waste recycling to meet higher standards of 65% of waste recycled by 2030.

Edited from a comment by Jonathan Robinson, Principal Consultant, Energy & Environment, Frost & Sullivan

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