Energy

Brexit Could Pose Risk To Electricity Supply, Industry Says


The United Kingdom is set to leave the European Union today “without any clear way forward for the electricity industry,” the sector has warned.

The U.K. will have technically left the EU as of midnight European time tonight, but for at least the next 11 months it will be in a “transition period” in which almost nothing will change. The U.K. will still be part of the EU’s single market, and will still have to follow EU law. This is to give time for a future free trade deal to be agreed.

The transition period is scheduled to end on 31 December, but the U.K. has the option to request an extension of up to two years. British Prime Minister Boris Johnson says he wants a free trade agreement similar to the one the EU has with Canada. But given that the Canada arrangement took ten years to negotiate, few think such an agreement with the U.K. could be reached in 11 months. Nevertheless, Johnson has promised the British public that he will not extend the transition period.

The risk is that the U.K. will fall off a Brexit cliff edge at the end of this year into the disorderly no-deal Brexit scenario businesses have been terrified of for three years. The electricity industry is no exception.

The industry association Eurelectric has sent a statement to both the EU and U.K. governments warning that inadequate attention to these energy issues in whatever arrangement succeeds the transition period. They are urging negotiators to include an energy and climate chapter in whatever is worked out. “This is a must to avoid major problems,” Eurelectric says.

Specifically, the electricity industry says that there are four critical points that mnust be included so as not to avoid major disruptions. First, they are calling for the continuous participation of the U.K. in the EU’s Internal Energy Market and the EU’s energy agencies such as ACER, Euratom and Entso-E. “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,” they say.

In 2019, cross-border interconnectors made up almost 10% of the U.K.’s electricity demand, and imports are expected to cover 20% by 2025, they point out.

Eurelectric is also calling for the deal to safeguard of the Integrated Single Electricity Market between Ireland and Northern Ireland. Thirdly, they want the U.K. to coordinate their approaches in reaching carbon neutrality by 2050 – something both Brussels and London have committed to. Lastly, they say the deal must include a governance and arbitration mechanism to facilitate the free and fair trading of electricity. This is essential, they say, to settle any regulatory divergences that may arise.

The absence of such a cooperation framework could jeopardise electricity delivery, they say.



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