The head of Eurelectric, the lobby group for electricity utilities in Europe, has called on the UK and EU to reach a deal on Brexit to avoid rising power prices, security of supply issues, and disruption to global energy trades.
In an open letter Eurelectric chief executive Kristian Ruby said the group “feels the need to reiterate our call” for a deal. Unless it was achieved he warned of:
- “Real and severe risks to security of supply” on the island of Ireland and its all-island market. “Ireland’s gas market is also closely linked to that of the UK, with over 42% of gas imported. Close trading arrangements are essential to keeping gas and electricity prices for Irish customers at reasonable levels”, he said.
- Additional costs of up to £500m per year in 2020 due to less efficient electricity and gas trading.
- Added risks to ‘mutually beneficial investments’ like North Sea development and interconnectors, because “These projects need to attract various sources of finance and will not move forward without deep levels of ongoing cooperation”.
- The risk of regulatory arbitrage if UK and EU regulations diverge, “as a significant part of [global energy] trading venues (mainly brokers) used for hedging energy risks are located in the UK.”
- Weakening of collective climate ambitions. “We would be gravely concerned were the withdrawal of the UK to lead to lower levels of ambition”, he said.
In any UK/EU agreement “it is vital that any Political Declaration includes energy and climate change as priority areas which are clearly addressed”, he said.