The UK government has guaranteed to underwrite EU funding for trans-national energy projects, including gas and electricity interconnectors, in the event of a “no deal” Brexit.
The Business, Energy and Industrial Strategy department issued a paper yesterday outlining arrangements surrounding projects which have been awarded grants from the EU’s Connecting Europe Facility when Brexit takes place.
The CEF supports key infrastructure projects, which have been designated as a Project of Common Interest (PCI) because they link the energy systems of EU countries.
These projects, which are deemed to deliver benefits for the wider EU, also benefit from a streamlined permitting process. CEF grants can pay for pump priming work such as feasibility studies, archaeological digs and other help with construction.
All but two of the interconnector projects proposed between the EU and the UK have been awarded PCI status.
If there is ‘no deal’ next March, when the UK is due to leave the EU, the document says the UK government will guarantee any energy grant awards made or agreed before exit day,
It says: “In the unlikely event that the UK leaves the EU with no agreement in place, UK organisations benefiting from CEF energy grant awards will be able to continue without disruption.”
The government says the streamlined permitting process for PCIs will also continue for a limited period.
The UK government guarantee applies to all CEF grants that are not honoured in full by the European Commission.
Silke Goldberg, a partner at the solicitors Herbert Smith Freehills, welcomed the government’s announcement.
She said: “As a stop gap, this is massively welcome. Had the government not done it, this would have posed serious risks.”
But she said the UK government had to think ‘long and hard’ about longer term support for interconnectors, which is not covered by yesterday’s announcement.
The document is one of a large number issued yesterday, outlining how different areas by a so called ‘no deal’ scenario.
Another, issued by the Department for Transport, has sparked concerns that the roll out of the electric vehicles could slow down if there is no deal.
Under current rules, EVs sold in the UK contribute to EU-wide emission fleet reduction targets for motor manufacturers.
However once the UK leaves the EU, these regulations will no longer apply to the UK, giving car and van makers greater incentives to sell low emission vehicles in members states where sales will contribute to meeting their emissions reduction targets.