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How the UK’s exit from the EU will impact our control over the electricity market

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As of last month, the UK is no longer a fully fledged member of the European electricity market. According to a European Commission spokesperson, power continues to flow across inter-connectors on both sides of the Channel, “albeit less efficiently.”

What does that mean, in practical terms? It means that there is no access to day-ahead or intraday trading tools for members of the European Federation of Energy Traders, an association based in the UK. It will also require a lot of extra paperwork for each transaction made. All this additional red tape of customs declarations add to the traders’ burdens. Initial estimates are that all this extra bureaucracy could increase ultimate consumer bills by between 2-5%.

On top of that, the UK is also out of the European Network of Transmission System Operators, which is also known as ENTSO-E. This is the mechanism under which electricity transmission system operators interact.

Inevitably we are also kicked out of ACER, the European Union Agency for the Cooperation of Energy Regulators. This oversees the bloc’s entire energy market and, ironically, for many years was run by OFGEM’s former chairman, Lord Mogg.

The consequence of all this is that UK consumers will inevitably be exposed to a whole range of  measures and initiatives that will be adopted for the European electricity market. These will have been decided between the remaining 27 members, devised in rooms from which the UK is effectively banished. Not really much ‘taking back control’.

Never mind. The energy chapter of the Christmas Eve agreement expires on June 30, 2026, unless both the EU and the UK are happy to continue on the same basis. My advice to the UK Government would be to open those 2026 energy chapter negotiations straight away.

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