Industry calls for UK-EU electricity market, COP24 cooperation post Brexit

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In an open letter, a range of organizations and corporations from the energy and consumer goods industry, including EDF, Engie, the British Irish Chamber of Commerce and Unilever, have urged the EU and the U.K. to continue their cooperation on the energy market, following Brexit.

Failure to do so, could result in further price hikes in the British energy market, put U.K. renewable energy targets at risk, and jeopardize the Irish Single Electricity Market (SEM).

The band of organizations highlights the importance of barrier-free energy trade for the continuation of the Paris Climate goals. For that, the companies propose that no tariffs should be imposed for energy trading on Britain’s interconnectors. There are currently three interconnectors between Britain and the EU, with several more at various stages of development.

“Interconnection will play an important role in helping to balance energy flows as an increasing proportion of intermittent renewable energy is brought onto electricity grids. Any imposition of tariff or non-tariff barriers to the flows of energy across interconnectors would increase the cost of the low carbon transition and set back action on climate change,” say the organizations in the letter.

They continue, “The aim, therefore, must be to ensure that trading of energy operates freely across borders on a level playing field that keeps costs down for consumers and ensures decarbonization and security of supply. Continued wholesale market integration between the UK and the EU should, therefore, be encouraged. The Irish Single Electricity Market (SEM), one of the many benefits that resulted from the Good Friday Agreement would face a possibly existential risk if cross-border electricity tariffs were applied.”

In a white paper published this summer, the U.K. Government said it is unclear if it will remain part of the Internal Energy Market (IEM) of the EU. According to the paper, the government is disinclined to formulate a common rulebook for the technical requirements for electricity trading, such as market coupling, or consistent carbon pricing. The latter could, however, be implemented by remaining in the EU’s Emissions Trading System – a point, which was endorsed by the letter’s signatories.

Furthermore, in the same publication, the U.K. hinted that it favors remaining in the European Networks of Transmission System Operators for Electricity (ENTSO-E).

The letter continued by saying that the signatories need clarity on whether the U.K. government will uphold climate standards, to prevent international players from undercutting them on the U.K. market. To this end, the U.K. and the EU should maintain their joint efforts in implanting the Paris Climate Agreement, also at the upcoming Conference of Parties (COP 24), set to be held in Poland in December of this year.

“By including these priority issues in a Climate and Energy Chapter, the UK and the EU can help to ensure energy bills are kept as low as possible whilst enhancing energy and climate security for all Europeans. Our group of organizations would be interested in meeting with you both [May and Juncker] to discuss these issues in more detail,” the organizations conclude in their open letter.

The white paper, on the other hand, states that the U.K. does not believe that continued participation in the IEM should require common environmental and climate change standards.

The letter is the latest in a  row of open letters sent to the U.K. government in recent days. Last week, it also received a letter, signed by several hundred companies from the Solar Trade Association, and Renewable Energy Agency, which took umbrage at the U.K.’s proposal to phase out the solar tariff schemes in the U.K.