The effect Brexit could have on the UK’s energy industry has been at the forefront of concerns recently.
Last week, the cross-party business, energy and industrial committee warned that the country’s nuclear industry could be at risk if the UK ends up with “no deal” in its negotiations with the European Union.
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No longer having access to the Internal Energy Market (IEM), and rescinding memberships of the Emissions Trading system and the European Atomic Energy Community (Euratom) are all concerns from the committee which believes the UK’s power supplies will be threatened before a suitable arrangement has been established.
According to a report out today by Chatham House, along with the University of Exeter and the UK Energy Research Centre, energy policy negotiations after Brexit offer the UK and EU an opportunity to develop new models of partnership and common ground imperative.
Matthew Lockwood, senior research fellow in the Energy Policy Group (EPG) at Exeter, said:
“The complexity and politically sensitive nature of the Brexit negotiations are already causing friction between the UK and the EU27. On energy policy, however, connected networks and mutual benefits from integrated markets mean that there is an opportunity for a positive outcome.”
What needs to be done?
The paper notes that it is in both the UK’s and the rest of the EU member states (EU27) interests to allow the UK to continue to collaborate on energy policy with EU and non-EU member states.
This would ensure that existing and future interconnectors, such as physical pipes and cables that transfer energy across borders, are used as efficiently as possible.
The best way to achieve this is to establish a new pan-European energy partnership, an enlarged European Energy Union.
The paper suggests this could lead to a useful platform for aligning EU policies with third countries, such as Norway, Switzerland and now the UK to help them push forward common initiatives
As well, maintaining close cooperation and integration in the IEM is important for the UK and EU27 post-Brexit.
However, in order to do this, the UK government and other stakeholders will need to maintain an active presence at European energy forums, and there’s no guarantee this will happen.
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Antony Froggatt, senior research fellow in energy, environment and resources at Chatham House, said:
“Close collaboration with the EU post-Brexit will be vital if we are to maintain energy security and achieve our legally binding emissions reduction targets.”
What about nuclear?
Now that the UK has formally triggered Article 50, the country has to leave Euratom, the treaty which governs the EU’s nuclear industry.
This will have a significant impact on how the industry functions in the UK, particularly nuclear material safeguards, safety, movement across borders and research and development (R&D).
It will be difficult for the UK to work out an alternative to Euratom during the two-year Brexit negotiations but the report recommends that the UK establishes a framework to fall back on to ensure nuclear safety and security.
How will funding work?
EU funds and loans from the European Investment Bank (EIB) account for around £2.5bn of the UK’s energy-related infrastructure, climate change mitigation and R&D funding every year.
The UK government will need to domestically replace these sources of funding to ensure that the UK’s energy sector remains competitive.
How will the UK target climate change outside of the union?
The UK and the EU’s climate change policies have evolved together over time and are strategically aligned. Under the so-called Great Repeal Bill, most EU laws will be converted into UK law once the UK leaves the EU.
This means directives such as the Clean Energy for All Europeans legislative package should probably become law.
According to the UK’s committee on climate change, the UK will continue to increase its overall emissions targets up until 2030, as part of the preparations for the Paris Climate summit.