Energy should be priority in future UK-EU relationship: Eurelectric

London — Energy and climate should be a top priority in the UK-EU future relationship, electricity industry association Eurelectric said in a position paper Friday.

Negotiators on both sides need to take care to avoid major problems impacting the energy markets and Europe's collective approach to climate protection, the group warned.

"How will the UK electricity market be regulated as of February 1? What changes will affect the sector? Are we at risk of a blackout or growing prices?" Eurelectric said in a statement.

"All these questions are legitimate and the EU power sector urges negotiators to include an Energy and Climate Chapter in the post-Brexit transition arrangement, which will be drafted in the coming 11 months. This is a must-have to avoid major problems," the group warned.

Eurelectric urged the UK to remain a participant in the EU's Internal Energy Market and relevant EU agencies, including the European Network of Transmission System Operators (Entso), the Agency for the Cooperation of Energy Regulators (ACER), and the European Atomic Energy Community, Euratom.

Continued membership of these groups would ensure an integrated wholesale energy market, fit-for-purpose cross-border interconnections and efficient energy trading agreements that benefit consumers, Eurelectric said.

It also called for a safeguard of the Integrated Single Electricity Market between Ireland and Northern Ireland. This would provide significant economic benefits to consumers, including access to a more efficient and larger scale electricity market, cheaper sources of electricity and the integration of "unprecedented levels of renewable energy and enhanced security of supply," it said.

Carbon neutrality

Eurelectric also urged the UK and EU to develop a clear action plan to reach carbon neutrality by 2050.

The action plan should ensure the maintenance of the UK in EU funding projects for the deployment of low carbon energy infrastructures and technologies, for example Horizon 2020 --- the EU's biggest research and innovation program with funding of almost Eur80 billion ($88.5 billion), which aims at securing Europe's global competitiveness.

The group also said it supported the provisions of a political declaration on future relations between the EU and UK to consider linking a UK emissions trading system to the EU's system. The UK is set to leave the EU ETS on December 31, 2020 -- the end of the system's third trading phase.

"Continued collaboration on climate diplomacy will allow for a common effort to achieve decarbonization and limit long term temperatures in line with the Paris Agreement and the commitment in the EU and the UK to reach net zero by 2050," it said.

The UK would also benefit from participating in the Connecting Europe Facility – a key EU funding instrument to promote growth, jobs and competitiveness – as well as Projects of Common Interest, which includes projects identified as key priorities in interconnecting Europe's energy system infrastructure, Eurelectric said.

The group also said a sturdy governance and arbitration mechanism is needed to facilitate a free and fair trading of electricity in a competitive investment environment, and to settle any regulatory divergences that may arise.

"The absence of a cooperation framework would otherwise jeopardise the delivery of secure, affordable and clean electricity to consumers," it said.