Energy UK trade group urges continued membership of EU ETS and the internal energy market, in order to deliver Irish cross-border energy trade and close cooperation on climate policy
Britain must stay within the EU's internal energy market, maintain cross border energy trade on the island of Ireland, and ensure close cooperation with the EU on tackling climate change after Brexit, the UK's energy industry urged today.
Energy UK's intervention came in a wide-ranging new policy paper, which calls for a "comprehensive energy and climate chapter" to be part of any future trade agreement with the EU. The trade body's members feature many of the leading companies from across the energy supply chain, including the 'Big Six' utility giants, Drax, Orsted, Good Energy, and others.
The paper makes clear that close alignment with the EU on energy trade and policy after Brexit is crucial to delivering UK climate targets, as well as ensuring security of energy supply and keeping costs down for consumers.
Preserving the mutual benefits for consumers, businesses, competition, and the environment should be at the centre of any post Brexit deal struck with the EU, said the trade body's chief executive Lawrence Slade.
"In order to keep costs down for UK customers and businesses, maintain security of supply and meet our climate targets it will be essential for the future EU-UK agreement to have a comprehensive energy and climate chapter and that we have participation in the Internal Energy Market," he said in a statement. "We will continue to work with all stakeholders in the UK and the EU to help shape our future energy relationship with the EU to ensure a successful outcome."
On climate policy specifically, Energy UK believes the UK should continue to play a leadership role in the decarbonisation agenda at both European and global levels, which it argues requires Britain to remain "closely aligned" with EU climate policies and targets.
Moreover, it calls for the UK to remain a part of the EU emissions trading scheme (ETS) at least until the end of 2020, but also potentially beyond that date "depending on future governance". The paper describes the ETS as playing a "key role in supporting action on climate change".
Other priorities for the industry outlined in the paper include maintaining a close association with the Europe-wide nuclear agreement Euratom, securing trade and customs arrangements that allow the free trade of energy parts, and a "sensible and proportionate migration system that does not inhibit the competitiveness of the industry".
It came as Energy Minister Richard Harrington today requested nearly £2.3m from the Treasury to "provide financial cover" for a new domestic Office for Nuclear Regulation to replace some of the duties of Euratom after Brexit.
The Enegry UK paper also stresses that in order to "avoid a cliff-edge situation" the UK must agree to internal energy market rules on energy interconnection and trade during the Brexit transition period, and also keep the current terms that allow for UK participation in the ETS.
Politically, however, remaining in the internal energy market may prove to be problematic for a Conservative government seeking to keep both hard and soft Brexit wings of its ranks onside. As commentators have pointed out, it may be very difficult to remain a part of the internal energy market without also staying in the wider single market for trade.
Lobby group @EnergyUKcomms says UK *must* remain in EU's internal energy market, to keep costs down & meet climate goals.— Adam Vaughan (@adamvaughan_uk) February 2, 2018
But Lord Teverton told me this week "if UK comes out of the single market...there is no way I can see we will remain within the IEM."
Indeed, remaining in the wider single market would be a significant bone of contention for hard Brexiteers keen for the UK to get as far away from EU rules and regulations as possible after Brexit, while also ensuring an end to freedom of movement - a major sticking point for single market membership.
However, a leaked strategy paper yesterday suggested the EU has an appetite to instigate strong counter measures on trade with the UK in order to ensure regulatory alignment continues post-Brexit. The document raises the prospect of punitive new trade measures if the UK were to water down existing environmental and social protections post-Brexit.
Energy UK's 100-strong membership of suppliers, generators and stakeholders across the gas and electricity sector - which together claim to deliver £88bn in economic activity to the UK - have set out their stall in support of continued close alignment. The big question now is whether a government that has committed to delivering a Green Brexit is listening to their concerns.
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