UK referendum goes down to the wire


June 17, 2016

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Even one month ago it was near-unthinkable that the UK people would vote to leave the European Union on 23 June.

Now it is possible and, if you believe some polls, probable — as long as the vote goes ahead as planned after yesterday’s shocking murder of MP Jo Cox, who has campaigned for the Remain side.

The UK’s prime minister, David Cameron, will no doubt be aghast that losing is a realistic proposition, but we are not. We wrote in January about his “track record of mismanaging big votes”because of the panic that accompanied Scotland’s independence referendum in 2014, and we are now seeing it again. Despite the risk that voting to leave the EU could tip the UK back into recession, voters have grown sick of Cameron’s ‘Project Fear’.

Even so, we hope that the UK people vote to stay.

This is not just because the upheaval seems unnecessary, though that is part of it. We are concerned that leaving the EU would give UK leaders more opportunity to turn their backs on the wind sector, which is a particular threat to the UK’s leadership position in offshore wind. The UK would also suffer if Brexit harms London’s position as a financial centre, with firms moving operations to Frankfurt or Paris in a bid to stay in the single market.

And we are concerned that Brexit poses an existential threat to the EU, which could harm its role in introducing laws to encourage the rollout of wind and other renewables.

Those in the Leave campaign would say we are being too risk-averse and maybe we are, but that is hardly our fault. Leave has given no clear picture about what a post-Brexit UK looks like.

Until this week, that is. On Wednesday, the Leave campaign set out a ‘roadmap’ for how the UK should restructure its relationship with the EU after 23 June. This seeks to quell the fears of investors and others by saying that the UK would not immediately notify the EU of its decision to leave, but would look to get a new settlement by the next general election in May 2020. Leavers would call it pragmatic, but to us it looks like four years of uncertainty.

However, some prominent campaigners argue that leaving the EU could boost UK wind.

Michael Liebreich, founder of Bloomberg New Energy Finance, said that tackling climate change is only possible with technological innovation and that unshackling from the anti-innovation EU would enable UK renewables businesses to innovate more.

It is a positive view, but we are not convinced that it is the EU that is stopping UK firms from innovating. The biggest challenges for UK wind companies are from Cameron’s government.

There is also a view that the EU is not the only game in town when it comes to getting big European nations to sign up to renewables targets. It was the United Nations that brought together 196 countries to agree the Paris climate deal in December, and this could have happened without the EU, in theory. However, the EU has been key in getting countries to sign up to EU-wide targets, and negotiating with superpowers including China and the US.

Indeed, the EU could play a key role in further negotiations if Donald Trump becomes US president in November and makes good on his plan to pull out of the Paris climate deal.

So will the UK vote to leave the EU? Well, with one week to go, we are holding our nerve. Last year’s election shows how misleading polls can be, and we still feel that the UK people are still a small ‘c’ conservative bunch when they are in the polling booths.

But here’s the thing. Even if the UK votes to leave the EU next week, this will not shake the global wind market to its core. It would certainly be a shock for economies in Europe, and thus dampen demand for wind energy, but the impacts on the likes of Brazil, China, India or the US would be either negligible or non-existent.

A Brexit vote would not de-rail global wind or halt investment — but it could make it tougher for UK firms to take part in the market.

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