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Cross-party group says Brexit could lead to energy shortages and high prices

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A House of Lords parliamentary committee has requested a full study be made on the likely impact of Brexit on both energy supply and prices for the UK.

The committee report, released Monday, stated that there is a possibility of energy shortage and a rise in prices if Brexit isn’t managed properly.
House of Parliament at Westminster, London
Britain imports around 5-6 per cent of its electricity via power links with France, Holland and Ireland, while around 40 per cent of the country’s gas supply comes via Norwegian and European pipelines.

The report asserts that Britain’s energy trading outside of Europe’s Internal Energy Market will likely be less efficient than the current arrangements.

“This creates the potential for higher energy bills, and leaving the EU could risk supply shortages in the event of extreme weather or unplanned generation outages,” it said.

The report said the government should carry out a full assessment on the impact of leaving Europe’s energy market and set out plans on how it expects to manage any severe supply shortages.

The Financial Times reports that the EU operates a solidarity principle regarding gas, which means in the event of a serious crisis member states are expected to help each other maintain supplies. Britain’s role in the arrangement, once it leaves the European Union in March 2019 is unclear.

The report also called on the government to review the possibility of creating a special transition period arrangement for the country’s participation the European Atomic Energy Community (Euratom), separate from the wider Brexit process.

Experts have said that if Britain leaves Euratom, there is a risk of new-build nuclear power projects being delayed or put on hold while new stand-alone nuclear cooperation treaties are negotiated with countries in the EU and outside it.

Nuclear plants supply around 20 percent of Britain’s electricity and the government hopes a new fleet of plants, starting with EDF’s Hinkley Point C, will be built to help replace ageing coal and nuclear plants set to close in the 2020s.

“Failure to replace (Euratom‘s) provisions by the point of withdrawal could result in the UK being unable to import nuclear materials, bringing the UK’s civil nuclear industry to a halt,” the report said.

Meanwhile Lawrence Slade, chief executive of Energy UK, said, “This report illustrates the challenges that Brexit poses to delivering the best outcome for UK energy customers. Energy UK has been clear on the benefits to consumers and the UK economy in continuing the free trade of energy with the EU including keeping costs down for both UK and EU citizens."

“We continue to work with all parties to help shape the future energy arrangements with the EU to ensure we maintain the efficient trading of electricity and gas, that we work together with the EU on tackling climate change through the future of the EU Emissions Trading Scheme and that the customs and immigrations systems continues to allow the flow of jobs, skills and imports.”

However James Court, Head of Policy and External Affairs at the Renewable Energy Association told Power Engineering International, that regardless of Brexit, the government's actions were having a more negative impact on the sector's potential progress. 

“The uncertainty of Brexit is certainly adding to the pressures for renewable developers, but the biggest suppressant of growth remains the UK policy framework which blocks some of the most cost efficient technologies to market," Court said. “We can certainly have a green Brexit, which will mean a cheaper, cleaner and future proofed energy market, but the UK needs to take the handbrake off the renewables industry." 

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