Britain’s decision to leave the European Union (EU) may push back its planned exit from coal, a mainstay in the nation’s energy supply for more than a century.
As the region’s second-biggest economy plans to close its last coal-fired power plant in less than a decade, it will be forced to rely more than ever on imports of natural gas and electricity. By leaving the EU, Britain could lose easy access to foreign supplies through the bloc’s single market, just as it plans to almost triple the number of power cables linking it to European nations by 2022.
UK utilities have closed coal plants that made up 9% of the total generation capacity in the past year, adding to a shrinking supply margin that forced National Grid Plc to pay about 150 million pounds ($196 million) to keep already idled stations on standby since 2014.
“Brexit could make keeping the lights on more challenging,” said Alex Harrison, counsel at Hogan Lovells in London, who specialises in electricity markets and utilities. “If security of supply is threatened, we may even see coal-fired generation being kept on post-2025,” he said.