Brexit: Experts set out risks and opportunities on energy policy
Speaking in London today, experts said that leaving the European Union posed significant risks and opportunities to UK energy policy, with implications for consumer energy bills, trading with other European countries and inward investment.
Michael Grubb, Professor of International Energy and Climate Change Policy, University College London, said that a failure to agree cooperative arrangements with other European countries could increase bills in the UK and reduce energy security.
“The implications of Brexit for energy policy hasn’t so far been a talking point, but it ought to be. Get it wrong, bills will rise and energy security could fall; get it right, and UK consumers and businesses can enjoy the benefits of free energy trade with the Continent, with Britain playing a key role in the continent’s continued energy development,” he said.
“We live in an increasingly interconnected world, and while the UK may be an island, we can’t be an energy island. Maintaining and building on energy linkages is essential for our future prosperity. But this is complex – and the sooner we begin talking, the better the chances of reaching a sensible conclusion.”
Antony Froggatt, Senior Research Fellow at Chatham House, highlighted the importance of interconnectors as use of variable renewable sources of energy grows in the UK.
“Electricity interconnectors will play an increasingly important role in the UK, both a source of power, but also to increase system flexibility to enable a greater penetration of renewable energy. To operate these as efficiently as possible will require the UK to remain fully integrated into the internal energy market, which should be an objective for the UK government during the negotiations,” he said.
Antony Froggatt also said it is essential for the UK to agree a replacement for Euratom, the EU’s nuclear regulatory body:
“The leaving of the Euratom Treaty poses significant technical, political and economic challenges for the UK and European. Achieving a timely but smooth exit from Euratom is essential as there is no ‘WTO’ agreement to fall back on; Brexatom without a replacement will lead to cessation of the movement of nuclear materials and no verification for the non-proliferation of nuclear material.”
Munir Hassan, Partner and Head of Clean Energy at CMS Cameron McKenna, set out the concerns for investors created by leaving the European Union.
“For businesses and investors, the vote to leave the EU has created a significant amount of uncertainty. For many, the transition period to leaving over the next two years is the main concern; after this there should be clarity as to whether a new relationship with the European Union has been agreed and what form it will take,” he said.
“In the intervening period a multitude of issues are thrown up by the complexity of leaving, including issues for overseas investors around currency risk and debt, the future level of cooperation between the UK and European energy markets, and the question of which rules the UK will comply with. Nevertheless, the UK will remain an attractive market for energy investors, and it is important that ministers focus on ensuring it remains so.”