Energy Supply and Decarbonisation Beyond Brexit: Politics and Policy

Unofficial AI-generated summary based on the public title and abstract. Not an official translation.

🔬研究者:Provides a framework for analyzing the impact of political changes on energy transition pathways.

🏢実務担当者:Highlights risks to energy supply and costs that could affect corporate energy procurement strategies.

🏛政策担当者:Offers insights into the trade-offs between energy security and climate goals in the context of institutional change.

THERE will be no long-term sustainable future for capitalism in the twenty-first century unless climate change can be limited. For a country like Britain, this means completely decarbonising the economy by the second half of the century, if not before. Britain's path towards a low-carbon economy has been significantly shaped by membership of the EU, especially through legislation and regulations affecting the energy sector, so Brexit raises important questions about whether and how that path will continue in the future. At the same time, Brexit poses some immediate and direct challenges for the security and costs of energy supply. This is because over the last twenty-five years the UK energy system itself has become intertwined with that of EU member states, through the development of the Internal Energy Market and the associated infrastructure. The UK is increasingly dependent on energy imports, many of which come from or pass through the EU. The EU has sought to increase its energy security, both through solidarity mechanisms between member states, and by forging better relationships with suppliers and transit countries. Leaving the EU therefore raises serious questions about the security and costs of Britain's future energy supplies. Moreover, Brexit is happening at a time of significant flux in energy systems around the world. After thirty years of free markets (at least in theory), state intervention and even re-nationalisation are increasingly back on the agenda. Even more fundamentally, new technology in electricity, coupled with developments in ICT and data handling, is leading to a rapid decentralisation of energy systems, disrupting established industry players and giving new roles to consumers. In what follows, we outline the key issues for energy and climate policy in a post-Brexit Britain. The next section looks at the potential impacts of different Brexit scenarios on energy supply, with a focus on costs and security. In the third section we consider how domestic political support for decarbonising energy may be affected by Brexit, and some of the low-carbon policy issues raised by separating from the EU. The fourth section looks at post-Brexit Britain in the light of long term technological and ownership trends in the energy sector. Our energy future could end up looking a lot more isolationist than it does now, or we could remain fairly integrated with the EU. Both futures are feasible, but differ significantly in the challenges they pose and opportunities they offer. The UK's energy policy and system have become increasingly integrated with the EU in recent decades, through regulatory harmonisation, common policy frameworks and infrastructure. But there has been little discussion of energy supply or its environmental impact within Brexit debates, except in the broadest terms. The July 2018 White Paper did not clarify the UK government's ambitions for the future relationship in this area. Effects of Brexit on energy supply will come via two routes: direct and indirect. Indirect effects work through routes outside energy policy and regulation. One of these is the impact of currency shocks or depreciation, leading to increases in the costs of fuels and imported inputs to supply chains. Another is potential disruption to supply chains as the UK leaves the Customs Union or the Single Market or both. There is also the possible effect of loss of access to skilled labour; for example, Oil and Gas UK estimate that around 5 per cent of the workforce in the North Sea is from EU countries.1 More generally, uncertainty linked to Brexit has cast a pall over investment decisions in the whole sector.2 The direct effects will come as a result of whether or not the UK stays in the Internal Energy Market (IEM). The IEM has developed over a number of decades through increasing European oversight and in areas such as market rules and environmental protection, legislative control of policy and regulation in the energy sectors of Member States. Thus, the IEM is not about tariffs but rather about a set of shared policies and rules and, more recently, participation in a linked automated network of trading platforms. The issues involved in leaving the IEM differ across gas, electricity and oil. Oil is globally traded, so the effects of Brexit can be expected to be fairly minor. By contrast, trade in gas and electricity, being largely or entirely networked through pipes and wires, is much more regional in nature. In the short term, the implications for gas security of supply are more important, but in the medium term it will be electricity that matters more, as we are likely to switch over to using electricity for cars and at least partially for heat as well, in order to decarbonise the economy. Gas trade with European countries from outside the IEM is entirely possible (as the example of Russia shows). The UK is well connected physically to the Continent, and with both North Sea fields and the largest liquefied natural gas (LNG) infrastructure in Europe, it is a useful trading partner. The main concerns are therefore less about trade per se and more about security of supply and price stability at times of peak demand, when we become more dependent on imported gas. When the UK joined the then European Economic Community in 1973, it was poised to enter the North Sea oil and gas boom period (Figure 1). By contrast, it leaves as its energy import dependency has re-emerged, with domestic production of gas and oil expected to continue to decline. The UK is highly dependent on Norway for winter imports, which might become a problem if there were a situation in which the UK had to compete for Norwegian gas with the remaining EU Member States, since Norway, being a member of the European Economic Area, is more closely aligned with the latter. This situation, and resulting price volatility, may make a post-Brexit Britain seek other options, including more LNG and strategic gas storage which could cost in the order of a £100 million a year.3 For electricity, the present trade (which tends to run from the Continent to Britain) could, in principle, continue. But experience from Switzerland suggests that the EU increasingly sees electricity in terms of participation in a system with common rules and interlinked trading platforms. The latter have developed in the last two years into a ‘market coupling’ system that has reduced transaction costs and led to more efficient allocation of interconnector capacity. Exiting this system as part of the IEM would mean a loss of economic benefits, as prices are likely to rise. Estimates of what is potentially at stake are of the order of €100 million a year. However, the market coupling system is expected to evolve to allow shared electricity system balancing services (that is, matching supply and demand in real-time), access to which would be worth a lot more, potentially of the order of several billion pounds a year.4 The balancing service offered by interconnectors will be of increased value as the share of wind and solar and other variable renewables increases. Any resulting rise in final energy prices is likely to sharpen the politics of energy affordability and the costs of decarbonisation. There are, therefore, good security and economic reasons for remaining within the IEM. However, doing so whilst leaving the EU would also come with some ‘sovereignty costs’. These would include having to accept future EU energy legislation and regulation without having a formal say in their development, and the jurisdiction of, if not the European Court of Justice, some other arbitration mechanism acceptable to the EU-27. This loss of influence would be considerable, as the UK has historically been a strong voice in the development of an integrated European energy system. Before leaving energy supply issues, it is worth briefly considering two other special problems. One is the Single Electricity Market (SEM), a common integrated electricity market and system across Northern Ireland and the Republic of Ireland which has been in place since 2007. The SEM involves shared regulation and major investments going into increased interconnection between the two. There are a number of possible post-Brexit arrangements, somewhat mirroring those arising from the wider Irish border problem. Maintaining the SEM has been recognised as a priority by all negotiating parties, and the UK government has reaffirmed its commitment to maintaining the SEM in the July 2018 White Paper, but finding a solution will be politically delicate. The other special problem is ‘Brexatom’ (British withdrawal from the Euratom Treaty). For more than sixty years, the Treaty has shaped the UK's domestic nuclear legislation, including standards and rules on nuclear safety and non-proliferation, health and safety and nuclear waste management. Of greatest concern is the non-proliferation of nuclear material. Currently, this is overseen by Euratom safeguards inspectors on behalf of the international community. Outside of Euratom, inspections will need to be carried out by the UK's Office for Nuclear Regulation (ONR), directly reporting to the International Atomic Energy Agency. The ONR accepts that it will not be possible to have capacity in place by March 2019 to inspect the same number of facilities as under Euratom, although it says that it will meet international standards. In addition, the UK will need to negotiate and ratify new bilateral agreements for supply of nuclear material and equipment, in particular with Australia, Canada, Japan, and the United States before the UK leaves the EU, or if there is one, at the end of the transition period. All of this is possible, but will take additional resources for the ONR and time is pressing. Post-Brexit, concerns about energy security, affordability and competitiveness are likely to rise up the agenda, which raises the question of whether the low carbon agenda survives. A common view is that it

• openalex https://doi.org/10.1111/1467-923x.12617first seen 2026-08-02 18:15:55