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The UK is set to leave the EU today without any clear way forward for the electricity industry. How will the UK electricity market be regulated as of 1 February? What changes will affect the sector? Are we at risk of a blackout or growing prices?
All these questions are legitimate and the EU power sector urges negotiators to include an Energy and Climate Chapter in the post-Brexit transition arrangement, which will be drafted in the coming 11 months. This is a must have to avoid major problems.
Eurelectric calls upon the negotiators to include the following 4 critical points in the upcoming Energy and Climate Chapter:
1. The continuous participation of the UK in the Internal Energy Market and relevant EU agencies/bodies (Entso, ACER, Euratom etc.).
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.
In 2019, cross-border interconnectors made up almost 10 % of UK’s electricity demand and imports are expected to cover 20 % by 2025. Cross-border synergies are key to balance out an increasingly renewables-based system, which will make Europe the first carbon neutral continent.
2. The safeguard of the Integrated Single Electricity Market (I-SEM) between Ireland and Northern Ireland.
Aside from being a symbol of cross-border political cooperation, the ‘all island’ approach provides significant economic benefits to consumers. 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
3. A clear action plan for the UK and EU to reach carbon neutrality by 2050.
The action plan should ensure the maintenance of the UK in EU funding projects for the deployment of low carbon energy infrastructures and technologies (e.g. 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.
4. A sturdy governance and arbitration mechanism.
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.