Brexit could threaten energy security with risks of supply cuts and bigger bills
Without its EU partnership, the UK would lose its energy trading efficiency and could face power shortages and higher costs, a report published by the House of Lords has revealed on Monday.
The EU is the UK’s key energy trading partner and it supplied around 12% of the UK’s gas (Norway and European pipelines) and 5% of electricity (France, Holland and Ireland) in 2016. Furthermore, the levels of electricity imports are expected to increase over the next five years.
Currently, the UK is part of the EU’s Internal Energy Market (IEM) which includes international aid between EU members to maintain supplies in the case of a serious energy crisis.
Although energy trade would still continue with the EU, such trade would be significantly less efficient and it could raise costs for consumers, the report said.
The nuclear sector, supplying 20% of Britain’s electricity, is another potential challenge raised by Brexit. The UK’s current use of nuclear material is allowed thanks to its membership in the Euratom which aids in the trade of such material and regulates its uses.
If the UK leaves the Euratom and they lose their license to trade in nuclear goods the country could face power shortages since they would have trouble maintaining current levels of electricity generation, the report said.
New nuclear inspectors and specialised workers would needed to be trained since they could no longer hire the EU's specialists.
The energy industry heavily relies on EU workers, particularly to fill engineering jobs. These workers are needed for the construction and maintenance of a secure energy system.
The House of Lords encourage the Government to train more UK workers but there would need to be a transition period with access to EU workers in the meantime.
According to the report, another challenge the UK might face is the Single Electricity Market in Ireland. This market has been a crucial part of the peace process and it has reduced energy prices in both parts of the island helping to reach decarbonisation targets.
It is vital for the UK for the SEM to continue post-Brexit, although this would mean implementing energy laws in Northern Ireland. The SEM will need to be carefully considered and new arrangements might be made if the UK leaves the IEM.
The Durham Energy Institute said “Whatever the final detail of the EU exit terms the UK is likely to be more peripheral to EU energy markets which will mean higher prices and more unreliable supply. Also supply risks will increase around issues such as importing gas through subsea pipelines or electrical interconnectors linking the UK to other EU countries.”
The House of Lords call on the Government to clarify its post-Brexit energy policy in the event the UK is no longer part of the IEM and in this case they request a transition period until the industry adjusts its working practices.