The UK’s future energy relationship with the EU matters more than it used to thanks to interconnectors. The proportion of electricity demand piped in over these physical links – 4.2 per cent – may look small, but at times of stress it rises to more like one-tenth, and that share will grow as the UK becomes more reliant on inherently intermittent renewable sources.
It was disappointing therefore that last week’s latest batch of government technical notices, which outline how different aspects of the economy will function in the absence of a deal with the EU, contained little of relevance to the energy sector. The only energy-specific notice related to the future of EU pump-priming funding for so called projects of common interest, such as interconnectors.
Most worryingly, there was no word on how the government intends to replace the EU Emissions Trading System, the main mechanism for pricing carbon. Energy UK has been pushing the Department for Exiting the EU (DEXEU) for clarity on this subject for nearly two years. The department’s silence is already making it hard for companies to make investment decisions.
All of the technical notices are expected to be published by the end of this month and DEXEU is holding a roundtable on energy issues next week. The sector will be crossing its fingers that the picture will be a bit clearer by then.