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Georgina Wright @GeorginaEWright
, 10 tweets, 2 min read Read on Twitter
Would a ‘no deal’ scenario exclude the UK from the internal energy market? The EU Commission's paper on this is interesting and worth decoding (see thread):
1. No - it’s impossible to unplug the UK from EU energy market (GB market is linked to continental Europe through interconnectors); plus, electricity can be traded under WTO rules.
2. But it’s not just about physical supply. Without an agreement in place with the EU (or a multiparty agreement with specific member states), UK could be excluded from the EU’s market coupling mechanism.
3. [Market coupling allows buyers and sellers to trade electricity across borders like they would within 1 country, and increasingly in real time. This is important as electricity demand and generation fluctuate during the day & electricity can be difficult to store].
4. So could the UK remain part of EU’s market coupling mechanism? Usual caveats: 1) UK would need to adopt (or mirror) lots of EU legislation; 2) create a governance structure to monitor agreement (that is suitable to EU). Switzerland has been negotiating for years...
5. If there is no agreement: UK TSOs (like national grid) will need to pay a ‘transmission system use fee’ on all imports and exports of electricity. This could result in higher prices for consumers.
6. If there is no agreement (2): UK ‘market participants’ would need to register with national energy regulators in countries where they are active. Registration forms need to be submitted in time (i.e. before end of transition). They would also need extra certification.
7. Basically, no agreement could result in more expensive electricity flows and be a bureaucratic headache for UK TSOs and stakeholders investing/participating in other member states’ electricity markets.
8. Main message then: it’s all about contingency planning: EU & UK have to agree the terms of UK’s withdrawal before March 2019. No deal is still a possibility: UK, EU governments and private companies need to plan accordingly.
9. Finally: this notice does not talk about the loss of UK influence over internal energy market rules - or how the EU27 and UK could work more effectively together. But our report does:
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