Electricity and gas
The UK remains committed to delivering cost-effective, clean and secure energy supplies. The UK has worked closely with European partners to liberalise and open energy markets, with wide-ranging UK energy sector expertise being highly regarded across the EU.
The Government is committed to facilitating the continuation of the Single Electricity Market (SEM) between Northern Ireland and Ireland. This is an example of North-South cooperation that has benefited consumers and the economies of Northern Ireland and Ireland. Negotiators have already made good progress on a legal provision to underpin the SEM in the Withdrawal Agreement and the UK will work with the EU to ensure that the SEM is maintained in any future scenario.
The UK is seeking broad energy cooperation with the EU, including arrangements for trade in electricity and gas, cooperation with EU agencies and bodies, and data sharing to facilitate market operations. It is common practice for countries to trade internationally in electricity and gas, and there has been a trend towards greater interconnectivity that has brought mutual benefits to trading partners, including lower prices for consumers and improved security of supply.
Trade in electricity takes place through interconnectors, the physical links which allow electricity to be moved between markets. There are currently three interconnectors between Great Britain and the EU Member States, one to France, one to the Netherlands, and one to Ireland. There are others in development, for example with Belgium, Norway, and Denmark.
The UK wants to explore with the EU the options for the future energy relationship. One option would be for the UK to leave the Internal Energy Market (IEM). In this case, the UK would explore what would be needed to ensure trade over interconnectors would continue without automatic capacity allocation via the IEM system.
An alternative option would be for the UK to participate in the IEM to preserve the existing efficient trading practices over interconnectors. In this case, the UK would need a common rulebook with the EU on the technical rules for electricity trading, such as the market coupling mechanism – as well as a consistent approach to carbon pricing necessary for the market to function, which, for example, could be delivered by remaining in the EU’s Emissions Trading System. However, the UK does not believe that participation in the IEM should require a common rulebook on wider environmental and climate change rules.
There are also advantages to close cooperation on technical and regulatory energy arrangements. The UK wants to explore with the EU the options for continued Transmission System Operator participation in the Inter-Transmission System Operator Compensation Mechanism, and continued membership of the European Networks of Transmission System Operators for Electricity (ENTSO-E) and Gas (ENTSO-G).
The UK is also putting in place arrangements so that, when trading after exit, businesses will have certainty that they will not face substantially different requirements compared to their current obligations under the Regulation on Wholesale Energy Market Integrity and Transparency (REMIT).
The UK will seek a close association with Euratom: a new relationship that is more comprehensive and broad than any existing agreement between Euratom and a third country and would help ensure the UK’s standing as a leading and responsible civil nuclear state is maintained.
This would be mutually beneficial for the UK and the Euratom Community, who will continue to share a common interest in ensuring energy resilience and security within Europe. Close cooperation on civil nuclear matters would also benefit citizens and businesses in the UK and across the EU, whether related to secure energy supplies, or the safeguarding of nuclear materials, equipment, and technology.
The UK proposes that this new relationship should be based on a comprehensive NCA between Euratom and the UK. This should:
- establish a cooperation mechanism between the UK safeguards regulator (the Office for Nuclear Regulation) and Euratom, enabling activity such as technical information exchanges, joint studies, and consultation on regulatory or legislative changes;
- provide for UK association with the Euratom Research and Training Programme, as part of an ambitious science and innovation accord;
- ensure continuity of contractual arrangements for the supply of nuclear material, either by allowing for existing nuclear supply contracts with the UK to remain valid after the UK’s exit or by providing for their seamless re-approval prior to the UK’s exit;
- minimise barriers and simplify export control arrangements in the trade and transfer of sensitive nuclear materials, equipment, and technology between the UK and the Euratom Community;
- provide for technical cooperation on nuclear safety including continued notification and information sharing arrangements on radiological events and monitoring, with the UK participating in EU systems such as the European Community Urgent Radiological Information Exchange (ECURIE) and the European Radiological Data Exchange Platform (EURDEP); and
- continue UK cooperation and information-sharing with the European Observatory on the Supply of Medical Radioisotopes.
This Article draws on the White Paper The Future Relationship between the United Kingdom and the European Union Presented to Parliament by the Prime Minister July 2018 Cm 9593. UK public sector information is reproduced pursuant to the Open Government Licence The Legal Materials contain UK public sector information licensed under the Open Government Licence v3.0. The Licence is available at http://www.nationalarchives.gov.uk/doc/open-government-licence/version/3/ (the UK Licence).