CBI cites mutual benefit of EU-UK continuity in energy post-Brexit but concerns remain

The Confederation of British Industry (CBI) believes there is mutual benefit to both the EU and UK maintaining as close a relationship as possible post Brexit, but strong concerns remain about funding and membership of Euratom, following Britain’s departure.

Michelle Hubert, CBI Head of Energy and Infrastructure told Power Engineering International that the top priority for CBI members is that both the UK and EU energy sectors remain as closely aligned as possible.
Michelle Hubert - CBI Head of Energy and Infrastructure
“When it comes to energy it’s very interesting – the EU and UK are physically connected and have shared a highly-integrated system for decades so the overarching, important thing for our members is continued alignment of rules between both.”

“The key things within that are the internal energy market, barrier free access and regulatory convergence. When it comes to such as interconnectors, that there would be a common-sense approach to the area of network codes for example.”

“There is such mutual benefit in maintaining the arrangement from an energy perspective ” obviously there is benefit to the UK but also massive benefit to the continent ” it’s worth emphasising that there is as much alignment as possible for energy security but also for shared goals around climate change and decarbonisation.”

“The UK has been quite a major player to date in driving that agenda forward in terms of the liberalisation of the energy market across Europe. Maintaining some co-operation and coordination is really key.”

The Energy and Climate Intelligence Unit recently pointed out potential advantages to the UK from Brexit, specifically mentioning the possibilities of being outside EURATOM.

Dr Jonathan Marshall, Head of Analysis at the ECIU told Pei, “Interestingly with nuclear one of the arguments put forward during the campaign about getting out of the EU pertained to state aid and the inability to use UK money to fund British projects.”

“One of the things the nuclear sector is lobbying very heavily for is to have more state aid or the state assuming more risk for supporting nuclear projects such as it did for Hinkley (Point C).”

“If you look at the main material coming out of the nuclear bodies it’s asserting that if we are going to crack on with Wylfa and Sizewell and Bradwell we need to get the costs down and the best way to do that is for the state to take on more risk.”

“This is something that would have caused more trouble with EU overseers due to State Aid regulation. If this sort of regulation no longer applies that has got to be one upside, as well as for all other parts of the power system that need more explicit sources of subsidy.”

However the CBI’s membership is keen to see Euratom membership retained for the good of the nuclear sector.

“There is a real risk to the UK’s civil nuclear power industry if we don’t preserve continuity in the arrangements,” says Hubert. “We want to see those benefits maintained either through continued membership or new arrangements. “

“Our members have been really clear that Euratom has been such an important feature within the nuclear industry. I think it’s about preserving as much continuity as possible whether you are talking about existing nuclear or new goals. The Prime Minister’s speech mentioned the importance of Euratom and that’s critical for us.”

The governance around the industry, the ability to shape and influence how it evolves, is also seen high on the agenda for the UK’s largest business lobby.

The UK has long been influential within the bloc as a member of such bodies as the European Network of Transmission System Operators (ENTSOE), as well as safety and environmental regulation.

“Such developments as the European Emissions Trading System are critical to our members on the generation side and also the energy intensive users who participate in the scheme.”

“Priority number one is that we continue to have full policy participation towards the end of this phase to the end of 2020. Thereafter having at least equivalent to what is in place while continuing to maintain decarbonisation goals and competitiveness with a system that can achieve those outcomes.”

Despite room for optimism, there is a general acceptance that the UK will no longer have access to the same fruits of membership as before, and one concern looming large for the business community centres around EU funding streams.

Some of that funding has been greatly helpful to Britain’s industry research, whether directly coming to businesses themselves or indirectly through the academic sphere.

“There is concern about future funding programmes We asked this question last year when we put out a report on infrastructure and some of the funding arrangements post Brexit.”

“68 percent thought when it comes to EU funding, energy is most important and there is a concern about what that means going forward and there is a lackà‚  of confidence that arrangements will be the same. It’s something to be mindful of but I can say industry investment in innovation will continue. We just have to make sure we have the right frameworks available.”

For now the CBI wants the government to do what’s best within its own control, until a clearer picture emerges of the UK’s newly independent future.

“Like any business in any sector, uncertainty on this scale is a concern and that remains the case”, says Hubert. “While there is uncertainty associated with the negotiations, it’s important we continue to maintain a strong domestic programme, and have as much certainty and stability in the domestic policy agenda to allow businesses to make the investments they want to make.”

“This includes the power system framework and such items as contracts for difference and making sure we have a good pipeline of auctions that take place over the next few years. Getting that kind of visibility really builds confidence and ability to invest.”

Confederation of British Industry warns of Brexit threat to energy

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