The UK will leave the EU at 11pm today. After months of uncertainty over when – or even if – it would leave, the big question now in all areas of business is: what happens next?
And in the energy sector, there are significant questions. Not only is the UK a member of the EU’s Internal Energy market, it has representatives sitting on key European energy organisations and agencies, including the European Network of Transmission System Operators, the Agency for the Cooperation of Energy Regulators and the European Atomic Energy Community (Euratom).
Eurelectric, Europe’s trade body for the electricity industry, is one organisation that is very concerned about the effects of the UK’s withdrawal.
In a statement released this morning, it says that the UK has left the EU “without any clear way forward for the electricity industry. How will the UK electricity market be regulated? What changes will affect the sector? Are we at risk of a blackout or growing prices? All these questions are legitimate.”
Eurelectric wants EU negotiators to ensure that the post-Brexit transition agreement that will be negotiated and drafted this year will include a chapter of Energy and Climate.
“This is a must-have to avoid major problems,” says the Eurelectric statement.
Eurelectric wants the negotiators to include four points that is says are critical to any Energy and Climate Chapter.
The first is the UK’s continued participation in the Internal Energy Market and relevant EU agencies and bodies such as ACER and Euratom.
Eurelectric says such maintained cooperation “is paramount to ensure an integrated wholesale energy market, fit-for-purpose cross-border interconnections and efficient energy trading agreements that benefit all consumers”.
Last year, cross-border interconnectors made up almost 10 per cent of the UK’s electricity demand and imports are expected to cover 20 per cent by 2025. Eurelectric says cross-border synergies “are key to balance out an increasingly renewables-based system, which will make Europe the first carbon neutral continent”.
Secondly, Eurelectric wants to ensure that the Integrated Single Electricity Market between Ireland and Northern Ireland is safe-guarded.
“Aside from being a symbol of cross-border political cooperation, the ‘all island’ approach provides significant economic benefits to consumers,” it says. “These include: access to a more efficient and larger scale electricity market, the provision of cheaper sources of electricity, the integration of unprecedented levels of renewable energy and enhanced security of supply.”
The third critical point Eurelectric is demanding is a clear action plan for the UK and EU to reach carbon neutrality by 2050. It says the plan “should ensure the maintenance of the UK in EU funding projects for the deployment of low carbon energy infrastructures and technologies, such as Horizon 2020, Connecting Europe Facilities and Projects of Common Interest.
“It should also guarantee that rules regarding carbon pricing are sufficiently aligned to allow for a cooperation between the EU and the UK towards full decarbonisation.”
And the fourth item is a “sturdy governance and arbitration mechanism”. Eurelectric says this mechanism is needed “to facilitate the free and fair trading of electricity in a competitive investment environment and to settle any regulatory divergences that may arise. The absence of a cooperation framework would otherwise jeopardise the delivery a secure, affordable and clean electricity to consumers.”