The large devaluation of the last few days will have significant effects on UK energy, from electricity to motor fuels. Other changes are also likely to slow decarbonisation of the economy.

Hinkley Point C is even less likely to be built.  As at the point of writing, the pound is down about 16% against both the dollar and the Euro compared to twelve months ago. That means that all the components for the power station purchased outside the UK will be 16% more expensive.

EdF has indicated in the past that “up to 57%” of the cost of Hinkley will be spent on UK goods and services. Let’s be a little sceptical and say that only half the cost of the new nuclear plant will be incurred in the UK.

The last estimate we saw was that constructing Hinkley was going to absorb £18bn. If half of that cost is derived from imported components and other charges the exchange rate decline over the last year has added over £1.4bn to the bill. Much of that has been in the last few days.

The electricity that Hinkley generates will be no more valuable to EdF than before. The strike price of £92.50 a megawatt hour does not rise in the event of a UK devaluation. So the prospective financial return to EdF and the Chinese shareholders has fallen sharply.

Perhaps as importantly, the position may get worse if the decline in the value of the pound continues but nobody can know this in advance, nor can it be fully hedged against.

Now all the UK’s nuclear projects will be more expensive

The same argument applies to all other prospective nuclear construction in the UK. Put at its simplest, the components for nuclear power stations will largely be shipped into the UK and then assembled here. The rapid devaluation that is going on has made all future projects more expensive. Nuclear fuel (costing about $5 for a megawatt hour’s worth of uranium) will also become more costly.

There is a counter-argument. If Brexit pushes interest rates in the UK even lower – and the signs are that this is happening – EdF may be prepared to take a lower return on its capital than would previously have been the case.

Rumours have suggested that EdF’s financial projections were based on a 9% cost of capital. We could argue that this number is too high; UK utilities generally run on a 6% estimate. However there is no sign yet that either EdF, the French government, or Hinkley’s Chinese backers are prepared to accept a lower return.

Lastly, as at Monday midday, EdF’s shares have fallen 20% since the Thursday referendum. EdF’s total stock market value is now less than the cost of Hinkley, a position seen earlier in the year but from which the company had been climbing out of. Investors see profoundly bad effects on EdF from Brexit.

Gas bills likely to rise around 10%

Gas fired power stations are relatively cheap to build and operate. (Perhaps £600-£700m for a gigawatt of capacity, or about a tenth the price of new nuclear). Fuel is the most important part of the costs they face. The price of gas is set in an increasingly international market.

Although contracts in the gas market are set in sterling, the underlying global price set in US dollars feeds into the UK’s auctions. Devaluation will therefore add sharply to the cost of buying gas for power generation. This will force up the long-run price of electricity because developers of new power stations will need guarantees of higher prices before they build their plants.

My rough calculation is that the wholesale price of electricity will need to be about 10% higher as a result of the events of the last few days. The price that homes pay for gas will be equally adversely affected.

If these increases do directly feed through to household bills, the immediate impact will be about £100 per home. People will also see inflation in the costs of goods and services they buy because their suppliers will also face higher costs of energy.

Those of us over fifty will remember this phenomenon clearly: large devaluations push up prices. The referendum decision will significantly affect the least prosperous because more of their income is spent on heat and electricity than wealthier groups. Fuel poverty will probably rise, possibly sharply. This will tend to affect worst those most likely to have voted to leave.

Petrol prices will start creeping up

The oil price has been gradually recovering after the sub $30 lows seen earlier in the year. Today, the cost of a barrel is bobbing around $50. But a dollar is now 15% more costly to those buying in British pounds than it was a year ago.

The price of petrol will therefore also rise although the percentage impact is softened by the fact that more than half the cost of a litre of fuel is composed of duty, VAT and UK denominated costs. Nevertheless, we’ll see a visible jump in fuel prices in the next few weeks.

The cost position of the UK North Sea will be improved, making it slightly easier for offshore oil and gas rigs to stay in business.

Will the rise in the price of oil help the sales of electric cars? It depends. In my view, the rise in renewables will in the longer run force down electricity prices all around the world. The economics of buying and operating an electric car will tend to get better as time goes as by, Brexit or not. Short term relative prices changes in petrol and electricity costs have little impact.

Renewables – priced in Euros, offshore wind will get more costly

The impact on renewables is slightly more nuanced. In the case of solar, withdrawal from the EU would mean that the UK could escape from the ‘Minimum Import Price’ facing Chinese companies. The price of solar modules would fall in Euro terms.

But because the Euro is now more valuable than it was a week ago, the impact in pounds would be much less. Perhaps the price of Chinese panels will be higher than it would have been without the devaluation and prospective exit from the EU.

Other system components, such as inverters, will also rise in price. Because over 80% of the cost of a large solar field is imported (my guess – better estimates welcome), PV will become much more costly, at least temporarily.

In the case of wind, more of the manufacturing value is added in the UK than in the case of solar. Perhaps they now regret it, but some of the large offshore turbine makers have factories and installation operations here. The UK should become an even more important centre for wind turbine construction as a result of devaluation.

However this optimism is only justified if we believe that the UK will be able to export to major markets without substantial tariff impediment. As of today, this is no certainty.

A large fraction of the total costs of offshore wind farms are denominated in Euros. The fall in the value of the pound will make developing large wind areas, such as those on Dogger Bank, more expensive. This will reduce the pace of offshore wind development, perhaps substantially.

Energy R&D

Places like Culham and Harwell, the UK’s energy research centres in Oxfordshire, will diminish sharply in size and importance. The nuclear fusion lab at Culham gets £55m a year from the EU, a large fraction of its budget.

As importantly, research into the conversion of surplus electricity into gas and liquid fuels that can be stored for months will be slowed. As PV and batteries becomes ever cheaper globally, this is the last remaining challenge for the clear energy revolution and the UK had been in a commanding position because of its world-leading role in biochemistry.

The Brexit vote is a huge setback for research in this area.

A right-wing government hostile to renewables?

More generally, of course, any new Conservative government will be profoundly sceptical about climate change. The part of the human brain that determines whether one is a denialist or a climate alarmist is the same as that which provided the opinion on the EU. So renewable and low-carbon energies of all types will be under threat as a result of the likely rightward shift of the government.

For example, the Vote Leave campaign literature railed about wickedness of the Large Combustion Plant Directive, the EU’s coordinated plan for reducing air pollution by forcing older coal-fired power stations to close. The LCPD was actually one of the undoubted successes of the EU energy and environment policy.

The implication is that the Leave people will be happy to see coal back as a major contributor to power supplies even though they also threw about the accusation that the EU had “tied our hands on decarbonisation”. That last complaint is about as far from the truth as is possible to get.

The primary conclusion I take from the events since the referendum is that energy is going to become more expensive in relation to household incomes, at least for a few years, and that the low-carbon transition in the UK will be slowed – partly by the impact of devaluation and loss of funding but also because of the rise in uncertainty over the future direction of energy policy.

Chris Goodall is an expert on energy, environment and climate change, and a frequent contributor to The Ecologist. He blogs at Carbon Commentary.

This article was first published on Carbon Commentary. His new book on the global rise of solar PV and energy storage, The Switch, will be published next week by Profile Books.

The large devaluation of the last few days will have significant effects on UK energy, from electricity to motor fuels. Other changes are also likely to slow decarbonisation of the economy.

Hinkley Point C is even less likely to be built.  As at the point of writing, the pound is down about 16% against both the dollar and the Euro compared to twelve months ago. That means that all the components for the power station purchased outside the UK will be 16% more expensive.

EdF has indicated in the past that “up to 57%” of the cost of Hinkley will be spent on UK goods and services. Let’s be a little sceptical and say that only half the cost of the new nuclear plant will be incurred in the UK.

The last estimate we saw was that constructing Hinkley was going to absorb £18bn. If half of that cost is derived from imported components and other charges the exchange rate decline over the last year has added over £1.4bn to the bill. Much of that has been in the last few days.

The electricity that Hinkley generates will be no more valuable to EdF than before. The strike price of £92.50 a megawatt hour does not rise in the event of a UK devaluation. So the prospective financial return to EdF and the Chinese shareholders has fallen sharply.

Perhaps as importantly, the position may get worse if the decline in the value of the pound continues but nobody can know this in advance, nor can it be fully hedged against.

Now all the UK’s nuclear projects will be more expensive

The same argument applies to all other prospective nuclear construction in the UK. Put at its simplest, the components for nuclear power stations will largely be shipped into the UK and then assembled here. The rapid devaluation that is going on has made all future projects more expensive. Nuclear fuel (costing about $5 for a megawatt hour’s worth of uranium) will also become more costly.

There is a counter-argument. If Brexit pushes interest rates in the UK even lower – and the signs are that this is happening – EdF may be prepared to take a lower return on its capital than would previously have been the case.

Rumours have suggested that EdF’s financial projections were based on a 9% cost of capital. We could argue that this number is too high; UK utilities generally run on a 6% estimate. However there is no sign yet that either EdF, the French government, or Hinkley’s Chinese backers are prepared to accept a lower return.

Lastly, as at Monday midday, EdF’s shares have fallen 20% since the Thursday referendum. EdF’s total stock market value is now less than the cost of Hinkley, a position seen earlier in the year but from which the company had been climbing out of. Investors see profoundly bad effects on EdF from Brexit.

Gas bills likely to rise around 10%

Gas fired power stations are relatively cheap to build and operate. (Perhaps £600-£700m for a gigawatt of capacity, or about a tenth the price of new nuclear). Fuel is the most important part of the costs they face. The price of gas is set in an increasingly international market.

Although contracts in the gas market are set in sterling, the underlying global price set in US dollars feeds into the UK’s auctions. Devaluation will therefore add sharply to the cost of buying gas for power generation. This will force up the long-run price of electricity because developers of new power stations will need guarantees of higher prices before they build their plants.

My rough calculation is that the wholesale price of electricity will need to be about 10% higher as a result of the events of the last few days. The price that homes pay for gas will be equally adversely affected.

If these increases do directly feed through to household bills, the immediate impact will be about £100 per home. People will also see inflation in the costs of goods and services they buy because their suppliers will also face higher costs of energy.

Those of us over fifty will remember this phenomenon clearly: large devaluations push up prices. The referendum decision will significantly affect the least prosperous because more of their income is spent on heat and electricity than wealthier groups. Fuel poverty will probably rise, possibly sharply. This will tend to affect worst those most likely to have voted to leave.

Petrol prices will start creeping up

The oil price has been gradually recovering after the sub $30 lows seen earlier in the year. Today, the cost of a barrel is bobbing around $50. But a dollar is now 15% more costly to those buying in British pounds than it was a year ago.

The price of petrol will therefore also rise although the percentage impact is softened by the fact that more than half the cost of a litre of fuel is composed of duty, VAT and UK denominated costs. Nevertheless, we’ll see a visible jump in fuel prices in the next few weeks.

The cost position of the UK North Sea will be improved, making it slightly easier for offshore oil and gas rigs to stay in business.

Will the rise in the price of oil help the sales of electric cars? It depends. In my view, the rise in renewables will in the longer run force down electricity prices all around the world. The economics of buying and operating an electric car will tend to get better as time goes as by, Brexit or not. Short term relative prices changes in petrol and electricity costs have little impact.

Renewables – priced in Euros, offshore wind will get more costly

The impact on renewables is slightly more nuanced. In the case of solar, withdrawal from the EU would mean that the UK could escape from the ‘Minimum Import Price’ facing Chinese companies. The price of solar modules would fall in Euro terms.

But because the Euro is now more valuable than it was a week ago, the impact in pounds would be much less. Perhaps the price of Chinese panels will be higher than it would have been without the devaluation and prospective exit from the EU.

Other system components, such as inverters, will also rise in price. Because over 80% of the cost of a large solar field is imported (my guess – better estimates welcome), PV will become much more costly, at least temporarily.

In the case of wind, more of the manufacturing value is added in the UK than in the case of solar. Perhaps they now regret it, but some of the large offshore turbine makers have factories and installation operations here. The UK should become an even more important centre for wind turbine construction as a result of devaluation.

However this optimism is only justified if we believe that the UK will be able to export to major markets without substantial tariff impediment. As of today, this is no certainty.

A large fraction of the total costs of offshore wind farms are denominated in Euros. The fall in the value of the pound will make developing large wind areas, such as those on Dogger Bank, more expensive. This will reduce the pace of offshore wind development, perhaps substantially.

Energy R&D

Places like Culham and Harwell, the UK’s energy research centres in Oxfordshire, will diminish sharply in size and importance. The nuclear fusion lab at Culham gets £55m a year from the EU, a large fraction of its budget.

As importantly, research into the conversion of surplus electricity into gas and liquid fuels that can be stored for months will be slowed. As PV and batteries becomes ever cheaper globally, this is the last remaining challenge for the clear energy revolution and the UK had been in a commanding position because of its world-leading role in biochemistry.

The Brexit vote is a huge setback for research in this area.

A right-wing government hostile to renewables?

More generally, of course, any new Conservative government will be profoundly sceptical about climate change. The part of the human brain that determines whether one is a denialist or a climate alarmist is the same as that which provided the opinion on the EU. So renewable and low-carbon energies of all types will be under threat as a result of the likely rightward shift of the government.

For example, the Vote Leave campaign literature railed about wickedness of the Large Combustion Plant Directive, the EU’s coordinated plan for reducing air pollution by forcing older coal-fired power stations to close. The LCPD was actually one of the undoubted successes of the EU energy and environment policy.

The implication is that the Leave people will be happy to see coal back as a major contributor to power supplies even though they also threw about the accusation that the EU had “tied our hands on decarbonisation”. That last complaint is about as far from the truth as is possible to get.

The primary conclusion I take from the events since the referendum is that energy is going to become more expensive in relation to household incomes, at least for a few years, and that the low-carbon transition in the UK will be slowed – partly by the impact of devaluation and loss of funding but also because of the rise in uncertainty over the future direction of energy policy.

Chris Goodall is an expert on energy, environment and climate change, and a frequent contributor to The Ecologist. He blogs at Carbon Commentary.

This article was first published on Carbon Commentary. His new book on the global rise of solar PV and energy storage, The Switch, will be published next week by Profile Books.

It’s been a couple of days since the shocking referendum result, and it feels no better than it did on the night.

In fact, if anything, it feels worse. Many of the worst fears of Remain activists seem to be coming true.

Reports of racism and xenophobia are soaring in the aftermath of the biggest victory for British xenophobia since the 1930s. Polish people are being targeted with xenophobic graffiti and having abuse posted through their letterboxes.

People of colour are reporting a rise in racist behaviour. Ethnic minority children are being bullied by their classmates with chants of “out, out, out!” And the far-right are on the march, wearing T-shirts emblazoned with the slogan “Yes we won! Now send them back!”

While Nigel Farage and Marine Le Pen celebrate, migrants across the country are terrified for their futures. Even many British people from minority backgrounds feel uneasy. In this context, it is hard to shake the feeling that we have set the already embattled cause of migrant rights back a generation.

The real problem is structural inequality – not migrants

Many of our campaigns at Global Justice Now were fought at the EU level. We now face the depressing prospect of defending these wins against a ‘Brexit government’ led by the far-right of the Conservative party.

And we cannot pretend that this was somehow primarily a ‘vote against austerity’ or the Tories. It is clear that immigration was key to the victory of Leave. To say otherwise is delusion. However, it is also true that poverty and inequality fuelled this result. That is the disease that has utterly divided this country and brought it to the brink of collapse. The tragedy is that the medicine being demanded – blaming migrants – is doomed to make the situation worse not better.

As progressive activists, we must shoulder some of the blame for failing to argue a more positive solution to the real problems people in this country face. We need to right that wrong now. We do this by persuading people that it is the system, not migrants, that are the real cause of our woes.

Let’s argue for a new kind of economy that would actually strengthen some of the communities that have voted for Brexit.

The situation is grim. But we cannot give up to these forces of fear and division. Brexit only won the referendum on the back of utterly shameless lies and deceit. Soon, as it become more apparent that they were conned, moderate Leave voters may start to make their anger felt.

Indeed many of them will be angry that their vote is being used by the far-right to promote xenophobia, while others will be aghast at the lies told about more funding for the NHS.

Standing up for free movement and workers’ rights

Nevertheless, though weak and based on lies, the Leave side have won a mandate to try and secure a Brexit deal. But we do not have to surrender to the prospect of trying to make the best of living in Little England (most likely shorn of Scotland and perhaps Northern Ireland). There are things we can do to fight the worst of the Brexit agenda.

If, as is probably the case, we do end up leaving the EU, we must fight to retain as much as possible of what we have just lost. Top of the list is free movement. A Norway-style relationship to the EU would allow us to keep free movement and some of the safeguards we would otherwise lose.

This is inferior to full membership as it would mean the UK free to negotiate what will probably be ultra-neoliberal trade deals with other countries. It would also mean no democratic influence in Brussels. But there is a genuine case to say that we should work to salvage what we can from the situation. The alternative, that the UK becomes a massive tax haven without freedom of movement, is much worse.

Regardless of what we voted and of which scenario plays out, one thing is clear. We have a serious responsibility to fight the more unsavoury symptoms of Brexit. We have to prioritise defending migrants and making the case for free movement for people from within and outside the EU.

We need to defend with renewed determination the regulations and ‘red tape’ that protects our environment and workers’ rights. And we need to ensure that, in a desperate bid to avert economic meltdown, the UK doesn’t resort to economic imperialism in the Commonwealth countries of Africa, Asia and the Caribbean to replace the wealth lost due to the weakening of ties with Europe.

Our movement has never been more important. We have a responsibility not just to campaign but to grow the movement. Get your friends, family, neighbours to join. The reason we lost this fight is because too many of us lived in a bubble for too long. Let’s break out of it and fight so a result like this never happens again. 

Petition: ‘UK media – stop the hate!‘ by Avaaz.

Alex Scrivener is policy officer at Global Justice Now.

This article was originally published by Global Justice Now.

If a week is long time in politics, how long does that make three months? Answer: an archaeological epoch.

That is to say, the period that lies ahead until the Conservative Party Conference in Birmingham in early October opens up giant vistas of time – plenty long enough for everything to change, completely.

And in that time, anything could happen. In fact, one of those anythings already has happened. No, I’m not talking about the Brexit vote itself, but about David Cameron’s response to it.

Before the referendum, he has promised that in the event of a Leave vote, he would instantly trigger the UK’s withdrawal by filing the Article 50 notification that sets off an irrevocable process concluding in the nullification of all EU treaties after no more than two years.

But then, Cameron did no such thing. He left that act to his successor – who would only take office at the Tory Party conference in October. Or possibly, it is now being mooted, in November. After all, surely the candidates should present themselves to the conference, giving members another month in which to ponder, and vote?

And then what’s the rush to file the Article 50 notification even then? None whatsoever, leadership favorite Boris Johnson is indicating. Let the EU stew! We will do it in our own time.

And then what if the new leader calls a general election (or indeed We The People demand one!)? That’s unlikely to take place until, say, March. Or April. Or even May. And we must surely await the outcome of the election before before filing the momentous Article 50 notification?

An extraordinary reversal

So what is really going on here? In my opinion, two things:

1. Over three months, or six months, public opinion is likely to change completely. The narrow but decisive majority in favour of Brexit that emerged in the referendum may have totally evaporated by then. It already appears to be shrinking away as the real economic implications sink in. Cameron knew this might very probably happen and, as a determined Remainer, has left the door firmly open to a reversal of the Brexit decision.

2. For the Leavers, it’s essential to secure the best possible deal from the EU. But the realpolitik says that filing the Article 50 notification is the last, not the first thing, you should do. The UK’s only real negotiating edge comes from its ability to be as awkward as possible while a full, permanent member of the EU. The moment it’s filed, they know we are out after two years no matter what. They (EU officials and other member states) can refuse to concede anything in the ‘formal negotiations’ triggered by Article 50, and after two years we are unceremoniously ejected with no come back.

So what this means, in the realpolitik, is that the negotiations start now – as in fact they already have, with EU officials and grandees, Germany’s Angela Merkel and our Boris all setting out their various positions. Only once these ‘shadow negotiations’ are complete and a deal is tied up can the UK actually file its Article 50 notification – and at that point it’s just over the lawyers to write down what has been agreed, and formal votes to follow in the EU Parliament and Council.

So in fact, it’s likely to be a very long time before any Article 50 Notice is signed – if indeed it ever will be.

But surely the UK has to leave? The People have spoken!

Up to a point, Lord Copper. First, it looks increasingly likely that there will be a general election before any final decision is made. If one (or more) of the parties stand on a ‘Remain’ manifesto pledge and get(s) elected into government, then the referendum result is trumped. And that’s something that could well happen.

But even without that, the government may in the future decide to hold a second referendum (as today urged by Lord Heseltine, backed by almost 4 million citizens) to allow the electorate to vote on the deal that has been negotiated (pre-Article 50, mediated by Angela Merkel), and all the other consequences of a Brexit that have been emerging. These are likely to include:

• no £350 million a week dividend for the NHS, or for anything else;
• slower economic recovery in the UK, fewer jobs, reduced pensions, and higher taxes;
• higher prices for fuel and other imports, and more expensive foreign holidays;
• a second independence referendum in Scotland, which the SNP would win;
• a ‘border poll’ in Ireland that could see Northern Ireland quit the UK and the Emerald Isle re-united in brotherly love;
• being stuck with all that ‘EU red tape’ we love to hate so much as a price of being in the single market – but with no power over it in the EU Council, Parliament or Commission;
• no reduction in immigration – again, the single market would force us to keep our borders open, with maybe a symbolic exemption for violent criminals;
• the certain knowledge that if we were to leave and re-join, it would take a long time and we would get a far worse deal than we have now – no rebate, no opt-outs and forcible entry into eurozone and Schengen.

And how many people would vote for that? OK, a few die-hard UKIPpers, but never enough people to win a majority. So there can be little doubt that the now inevitable delays will play into the hands of the Remainers.

Yes, all the talk now is of respecting the verdict of the people and all that. And so it will remain for some time to come. But with the strong shift in public sentiment that is already under way, and set to grow, it won’t last out a run of strong Remain opinion polls.

A best-case scenario?

Of course this may not end well for the UK, Europe and the environment. But it could. If Jeremy Corbyn survives the leadership putsch now under way from the Blairite rump of MPs in the Parliamentary Labour Party, he would be in a position to fight a putative general election on a powerful, progressive pro-EU platform.

This would be based on his vision of a social EU – an EU of the people, not the corporations; and a pro-environment EU, taking a lead on global warming, accelerating the transition to renewable energy economy, ramping up enforcement of environment laws, moving ahead with the creation of a ‘circular economy’, and clamping down on toxic agrochemicals.

And of course ditching TTIP, CETA, TISA and all the rotten medley of ‘free trade’ deals that hand over vast antidemocratic powers to global corporations and financiers.

That’s an election he could win, and go on to build the fairer, cleaner, greener, more inclusive Britain we so desperately need.

Oliver Tickell is Contributing Editor at The Ecologist.

Britain has voted to leave the EU. David Cameron has resigned as Prime Minister. And the markets are in turmoil.

There will now be an almighty battle to become the next Conservative Party leader and with it, until the next election at least, the next Prime Minister.

So let’s take a look at the candidates for the top job and find out what they might do to the environment.

Let’s start with the favourite, Boris Johnson.

Johnson is something of a climate sceptic and used his Telegraph column a few years back to cast doubts on the existence of global warming by pointing out that it was snowing in London.

The former London Mayor voted to allow fracking in national parks and areas of special scientific interest in December last year. In fact, he loves fracking so much, he said in 2013 that wanted it under the streets of the Capital.

“If reserves of shale can be exploited in London we should leave no stone unturned, or unfracked, in the cause of keeping the lights on. It’s time for maximum boldness in energy supply”, he said.

That’s right, ‘maximum boldness’, none of this namby-pamby ‘boldness light’, endorsed by the empty suits in Brussels.

The likely leader of post-Brexit Britain is also handsomely backed by Ukrainian millionaire and energy magnate Alexander Termerko who has tipped his man as the next Tory leader.

The man standing awkwardly behind Boris for much of the referendum campaign, struggling to clap like a human being, also voted to allow fracking in national parks in that December vote.

Michael Gove caused controversy while education secretary for threatening to remove climate change from the national geography curriculum. He’s also backed badger culling and the sell-off of English forests.

Given that he’s spent the last few months cheering him, you would think he’d be unlikely to challenge Boris for the leadership. But with strong support with the Tory base, he could be persuaded to throw his hat into the ring.

The rest of the leading figures in the Conservative side of pro-Brexit camp have a similarly un-green look to them.

Employment minister Priti Patel is seen as a rising star on the right of the Conservative Party. In a past life, she did PR for the tobacco industry. Now she’s one of the key figures within the parliamentary party’s right-wing 1922 committee.

On top of backing fracking in national parks, Patel has called on the government to hold firm against ‘anti-fracking extremists’. She also joined her group of Eurosceptics in voting to apply the climate change levy tax to electricity generated from renewable sources in March. October may well come too soon for Patel, but she’ll be a key figure in a Johnson’s government, whether she seeks the leadership or nor.

Other key Brexiteers who are unlikely challenge the leadership, but will play important parts include Chris Grayling, who has claimed that fracking was the “solution” to high energy bills, Iain Duncan Smith, was also fine with our national parks being fracked, and has “consistently voted against measures to prevent climate change”, according to They Work For You and Andrea Leadsom.

Leadsom asked if climate change was real when she started her job as an energy minister, but now insists she has been ‘fully persuaded’. She has dismissed ‘fracking scaremongering’ and has called the process an “opportunity not to be missed“.

Perhaps the least green of the Brexiteers, however, is former environment secretary Owen Paterson, and at this point he looks likely to run against Johnson for leadership.

A noted climate sceptic, Paterson has advocated scrapping the climate change act. He is also a supporter of the controversial Global Warming Policy Foundation and has spoken at events held by the organisation.

In a speech earlier this month, Paterson claimed that leaving the EU would be good for the environment, though as he has previously spoken about the “advantages of global warming”, it’s best to take that with a pinch of salt.

Theresa May is likely to be Johnson biggest challenger, but her standing with party activists has been damaged by her support for the Remain campaign in the referendum. She has a mixed record on the environment, and was absent for the vote on fracking in national parks before Christmas. A loyal cabinet member, May’s voting record mirrors the government’s record on energy and climate change.

These are unsettled times, but one thing is certain: if you thought the in-fighting in the Conservative Party was bad during the referendum, you won’t believe what’s about to come.

Joe Sandler Clarke is an Investigator at Greenpeace UK. He also writes for Greenpeace Energydesk, where this article was originally published.

The large devaluation of the last few days will have significant effects on UK energy, from electricity to motor fuels. Other changes are also likely to slow decarbonisation of the economy.

Hinkley Point C is even less likely to be built.  As at the point of writing, the pound is down about 16% against both the dollar and the Euro compared to twelve months ago. That means that all the components for the power station purchased outside the UK will be 16% more expensive.

EdF has indicated in the past that “up to 57%” of the cost of Hinkley will be spent on UK goods and services. Let’s be a little sceptical and say that only half the cost of the new nuclear plant will be incurred in the UK.

The last estimate we saw was that constructing Hinkley was going to absorb £18bn. If half of that cost is derived from imported components and other charges the exchange rate decline over the last year has added over £1.4bn to the bill. Much of that has been in the last few days.

The electricity that Hinkley generates will be no more valuable to EdF than before. The strike price of £92.50 a megawatt hour does not rise in the event of a UK devaluation. So the prospective financial return to EdF and the Chinese shareholders has fallen sharply.

Perhaps as importantly, the position may get worse if the decline in the value of the pound continues but nobody can know this in advance, nor can it be fully hedged against.

Now all the UK’s nuclear projects will be more expensive

The same argument applies to all other prospective nuclear construction in the UK. Put at its simplest, the components for nuclear power stations will largely be shipped into the UK and then assembled here. The rapid devaluation that is going on has made all future projects more expensive. Nuclear fuel (costing about $5 for a megawatt hour’s worth of uranium) will also become more costly.

There is a counter-argument. If Brexit pushes interest rates in the UK even lower – and the signs are that this is happening – EdF may be prepared to take a lower return on its capital than would previously have been the case.

Rumours have suggested that EdF’s financial projections were based on a 9% cost of capital. We could argue that this number is too high; UK utilities generally run on a 6% estimate. However there is no sign yet that either EdF, the French government, or Hinkley’s Chinese backers are prepared to accept a lower return.

Lastly, as at Monday midday, EdF’s shares have fallen 20% since the Thursday referendum. EdF’s total stock market value is now less than the cost of Hinkley, a position seen earlier in the year but from which the company had been climbing out of. Investors see profoundly bad effects on EdF from Brexit.

Gas bills likely to rise around 10%

Gas fired power stations are relatively cheap to build and operate. (Perhaps £600-£700m for a gigawatt of capacity, or about a tenth the price of new nuclear). Fuel is the most important part of the costs they face. The price of gas is set in an increasingly international market.

Although contracts in the gas market are set in sterling, the underlying global price set in US dollars feeds into the UK’s auctions. Devaluation will therefore add sharply to the cost of buying gas for power generation. This will force up the long-run price of electricity because developers of new power stations will need guarantees of higher prices before they build their plants.

My rough calculation is that the wholesale price of electricity will need to be about 10% higher as a result of the events of the last few days. The price that homes pay for gas will be equally adversely affected.

If these increases do directly feed through to household bills, the immediate impact will be about £100 per home. People will also see inflation in the costs of goods and services they buy because their suppliers will also face higher costs of energy.

Those of us over fifty will remember this phenomenon clearly: large devaluations push up prices. The referendum decision will significantly affect the least prosperous because more of their income is spent on heat and electricity than wealthier groups. Fuel poverty will probably rise, possibly sharply. This will tend to affect worst those most likely to have voted to leave.

Petrol prices will start creeping up

The oil price has been gradually recovering after the sub $30 lows seen earlier in the year. Today, the cost of a barrel is bobbing around $50. But a dollar is now 15% more costly to those buying in British pounds than it was a year ago.

The price of petrol will therefore also rise although the percentage impact is softened by the fact that more than half the cost of a litre of fuel is composed of duty, VAT and UK denominated costs. Nevertheless, we’ll see a visible jump in fuel prices in the next few weeks.

The cost position of the UK North Sea will be improved, making it slightly easier for offshore oil and gas rigs to stay in business.

Will the rise in the price of oil help the sales of electric cars? It depends. In my view, the rise in renewables will in the longer run force down electricity prices all around the world. The economics of buying and operating an electric car will tend to get better as time goes as by, Brexit or not. Short term relative prices changes in petrol and electricity costs have little impact.

Renewables – priced in Euros, offshore wind will get more costly

The impact on renewables is slightly more nuanced. In the case of solar, withdrawal from the EU would mean that the UK could escape from the ‘Minimum Import Price’ facing Chinese companies. The price of solar modules would fall in Euro terms.

But because the Euro is now more valuable than it was a week ago, the impact in pounds would be much less. Perhaps the price of Chinese panels will be higher than it would have been without the devaluation and prospective exit from the EU.

Other system components, such as inverters, will also rise in price. Because over 80% of the cost of a large solar field is imported (my guess – better estimates welcome), PV will become much more costly, at least temporarily.

In the case of wind, more of the manufacturing value is added in the UK than in the case of solar. Perhaps they now regret it, but some of the large offshore turbine makers have factories and installation operations here. The UK should become an even more important centre for wind turbine construction as a result of devaluation.

However this optimism is only justified if we believe that the UK will be able to export to major markets without substantial tariff impediment. As of today, this is no certainty.

A large fraction of the total costs of offshore wind farms are denominated in Euros. The fall in the value of the pound will make developing large wind areas, such as those on Dogger Bank, more expensive. This will reduce the pace of offshore wind development, perhaps substantially.

Energy R&D

Places like Culham and Harwell, the UK’s energy research centres in Oxfordshire, will diminish sharply in size and importance. The nuclear fusion lab at Culham gets £55m a year from the EU, a large fraction of its budget.

As importantly, research into the conversion of surplus electricity into gas and liquid fuels that can be stored for months will be slowed. As PV and batteries becomes ever cheaper globally, this is the last remaining challenge for the clear energy revolution and the UK had been in a commanding position because of its world-leading role in biochemistry.

The Brexit vote is a huge setback for research in this area.

A right-wing government hostile to renewables?

More generally, of course, any new Conservative government will be profoundly sceptical about climate change. The part of the human brain that determines whether one is a denialist or a climate alarmist is the same as that which provided the opinion on the EU. So renewable and low-carbon energies of all types will be under threat as a result of the likely rightward shift of the government.

For example, the Vote Leave campaign literature railed about wickedness of the Large Combustion Plant Directive, the EU’s coordinated plan for reducing air pollution by forcing older coal-fired power stations to close. The LCPD was actually one of the undoubted successes of the EU energy and environment policy.

The implication is that the Leave people will be happy to see coal back as a major contributor to power supplies even though they also threw about the accusation that the EU had “tied our hands on decarbonisation”. That last complaint is about as far from the truth as is possible to get.

The primary conclusion I take from the events since the referendum is that energy is going to become more expensive in relation to household incomes, at least for a few years, and that the low-carbon transition in the UK will be slowed – partly by the impact of devaluation and loss of funding but also because of the rise in uncertainty over the future direction of energy policy.

Chris Goodall is an expert on energy, environment and climate change, and a frequent contributor to The Ecologist. He blogs at Carbon Commentary.

This article was first published on Carbon Commentary. His new book on the global rise of solar PV and energy storage, The Switch, will be published next week by Profile Books.