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Brexit: the Paradox for UK renewables

Exiting Europe could make it easier for the UK to develop renewable technology by streamlining burdensome regulation – while also removing the single greatest driver of political will to develop a low carbon economy.

EU targets for reducing dependency on carbon-based energy are legally binding in a way that the likes of the Kyoto and Paris agreements are not, and member states can be fined if they come up short. Currently, a strong case can be made for new developments by reference to these targets – and the threat of fines certainly helps to focus minds, especially if the government of the day does not accept the economic arguments in favour of incentivising investment in renewables.

It’s a huge paradox, but a so-called Brexit could result in a system where it is easier to develop renewables infrastructure in the UK – but there are no strong incentives to make it happen. Putting it another way, we could become the easiest place in Europe to build wind farm infrastructure, but still not actually develop any.

Depending on the nature of the relationship between the UK and the rest of the EU in the event of a Brexit, we could also see the removal of restrictive state aid rules which impose requirements to maintain a level commercial playing field for firms wherever they are based in the EU – and the potential for new trade partnerships and domestic manufacturing to develop.

This is part of Out-Law's series of news and insights from Pinsent Masons lawyers and other experts on the impact of the UK's EU referendum.  Sign up to receive our Brexit updates by email.  

Read more on Pinsent Masons' Out-Law pages