UK ‘will leave’ EU internal energy market after Brexit

The European Commission has signalled its acknowledgement that the UK is leaving the EU’s internal energy market following Brexit.

The Commission’s taskforce for relations with the UK submitted a presentation to the Article 50 working party of the EU Council, which represents the national governments of the 27 remaining member states, at an energy seminar this month.

Utility Week has seen the slides presented by the Commission, which concern the internal preparatory discussion on the future energy relations between the EU and the UK.

They conclude that these will not be “business as usual” after the UK departs the EU.

“The UK will leave the EU’s Single electricity market and its tools” it says, adding that new EU-UK mechanisms will have to be developed in selected areas.

But, reflecting the Commission’s broader determination to prevent the UK from undercutting its erstwhile fellow EU member states, it states that the new framework requires “strong level playing field guarantees”.

The Commission is due to publish its draft negotiating mandate next week after the UK formally withdraws from the EU on Friday.

The document is due to be signed off towards the end of the month once it has been considered by the European Parliament.

The political declaration on future energy relations between the EU and the UK, agreed last autumn by the government and the European Council, stated that the supply of electricity and gas should be based on competitive markets and non-discriminatory access to networks.

It also said that the EU and the UK should establish a framework to facilitate technical cooperation between electricity and gas networks operators and organisations

And they will consider how a UK national greenhouse gas emissions trading system can be linked with the EU’s Emissions Trading System.

Tim Yeo, former chairman of the House of Commons energy and climate change select committee, told Utility Week that the government should use the political leeway created by its big general election victory last month to push for continued British membership of the IEM.

“They ought to be able to say that energy is an area where we don’t need to have the same distance from the EU.”

But Sarah Williams, head of Greener UK unit at the Green Alliance, expressed pessimism about the prospects for continued participation in the IEM following chancellor Sajid Javid’s recent call for British businesses to prepare for divergence from EU regulations.

She said: “If we are going for increased divergence, I don’t see how that will be possible. Participation depends on accepting certain rules and regulations. That will be one of the big questions. How that will be squared is difficult to see.”

On Friday, Utility Week will present a detailed analysis on what Brexit means for the sector