EU countries have a “strong commercial reason” to maintain gas and electricity trade across the English Channel, UK energy and clean growth minister Claire Perry said on Tuesday.
If Britain leaves without a withdrawal deal on 29 March, imports and exports of power and gas will cease to be governed by EU trading rules. While energy is highly unlikely to stop flowing, it could make trade slower and more expensive.
Britain shares power links with France, the Netherlands, Ireland and Northern Ireland, with more in planning stages. British regulators are working with electricity interconnector operators to make sure that new UK access rules for trading are approved by the time Britain leaves the EU, added Jonathan Holyoak, director of EU energy and climate change at the business, energy and industrial strategy department (Beis).
It is up to the EU to prepare rules on their side, but it’s in their interest to make sure trade can be as efficient as possible if there is no divorce deal, he and Perry told a House of Lords’ subcommittee.
“The French like it because they are exporting their nuclear power to us, and they don’t have anywhere else to send it – they send it to Germany, but no one’s allowed to know that,” Perry said. “There is a strong commercial reason to keep these flows.”
Perry told the subcommittee that Beis was handling 73 EU exit issues. The minster said three of those were currently “off-track” – including issues relating to the single energy market the European Union’s global satellite navigation system Galileo.
“The thing that’s tricky is the single energy market, and partly I think because of the dependence on other countries,” she said. Still, she stressed that the energy supply taps will not be shut off.
Brexit is particularly concerning for the two Irish countries, which share a single power market. The republic also relies on the UK for gas supplies and emergency oil stocks.
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Perry was more confident about no-deal preparations for leaving the EU’s emissions trading system (ETS), even though it would lead to an immediate break with the market.
The UK government said earlier this month that it would immediately replace the European carbon price with a tax, and will provide more details in the 2018 budget announcement on Monday.
Backlash to a tax from Scotland and Wales, which have devolved powers over environmental policy, was not “quite fair,” Perry said. “Ultimately, we’re trying to maintain a very strong price signal for carbon reduction, and we’re trying to do something that replaces an EU ETS market that we have been told we would have to leave in the event of a no deal.”
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