Antony Froggatt : Vote paid too little attention to energy Access to clean and affordable energy is a vital component of any modern society. But little attention was given to the implications of Brexit for energy during the EU referendum. The UK, Scotland and the EU-27 face important choices that could determine the extent of short to medium-term energy disruption from Brexit and the degree to which future co-operation in this field might be possible. Article 50 specifies that Brexit negotiations must be completed by April 2019, two years after the UK’s formal notification to leave. In addition, the European Commission has said three issues (the financial or ‘divorce’ settlement; the fate of EU nationals in the UK and visa-versa; and the border between the Republic of Ireland and Northern Ireland) must be settled before formal discussions can begin. What the agreement, including on energy, will look like is yet uncle ar. The UK Government has said Britain will be leaving the European single market, but a February 2017 white paper stated that the UK was “considering all options” on the energy relationship with the EU. Maintaining reliable and affordable emergy, and in particular electricity supplies, is essential for society and the economy. The UK’s decarbonisation will also need changes to the energy system in the EU, which will require significant and harmonised policy intervention across the whole of Europe. The UK is linked to both the Irish and continental electricity markets through 3 GW of electricity interconnection. The UK’s net electricity imports are expected to rise to 80 TWh in the mid-2020s. This includes a proposal for an electricity cable between Scotland and Norway. Britain had also planned to further harmonise its operating regimes with those of other member states to enable electricity cables or interconnectors between countries to operate wit h more flexibility. Increased interconnection will also be necessary. to accommodate the increasing deployment of variable renewables such as solar and wind in an efficient and cost-effective manner, otherwise known as market coupling. It is unclear what will happen post-Brexit . Remaining part of the market coupling system may require adherence to common European rules and operational codes, which the UK will no longer have as much of a say in. Energy access and trade is of course vital for Scotland’s fossil fuel industry as it receives gas from Norway – both directly and indirectly – via three pipelines. Three of the UK’s four major oil pipeline terminals are also in Scotland where they receive oil both from North Sea fields and Norway. The main point of concern for companies focused on production is the oil price and the impact of Brexit on currency exchanges, particularly since production costs in UK waters are already relatively high.
Herald 24th June 2017 read more »