Concern Over UK‘s Access to EU Electricity Market
In the final week that the United Kingdom enjoys full membership of the European Union, concerns have arisen over the UK’s access to the EU’s electricity market. A disruption or decreased access to the electricity market could result in higher bills, supply issues and a stall in de-carbonisation efforts.
The UK is a net importer of electricity. In 2017, it received 49% of electricity from France, 46% from the Netherlands and 5% from interconnectors with Ireland. In 2018, its own generation fell by 1.6%.
Ofgem, the UK’s industry regulator, does not expect an interruption to the flows of electricity or gas but has stressed the need for trading arrangements. A failure to find agreement on CO2 equivalence in trade negotiations between the UK and EU could lead to the return of tariffs or quotas. Electricity costs in the UK are currently slightly lower than the EU average. Higher electricity costs will put UK businesses and citizens at a disadvantage as overhead expenses will rise disproportionately to counterparts in the in the EU. Stakeholders should encourage trade negotiators to ensure level playing fields for UK citizens.