In this update, we review various aspects of a ‘no deal’ Brexit and the Withdrawal Agreement which organisations in the energy sector should know about.
In this update, we review various aspects of a ‘no deal’ Brexit and the Withdrawal Agreement which organisations in the energy sector should know about.
Last Thursday, leaders of the 27 remaining EU countries agreed to give the UK an extension of its departure date from the EU. If the UK Parliament approves the Withdrawal Agreement, the new exit date will be 22 May. If not, the UK will leave the EU on 12 April without a deal. For the energy sector, the difference between these two outcomes is highly significant.
Under the Withdrawal Agreement there will be a ‘transition period’ until the end of December 2020. This would give the energy sector a period of time to prepare for a separation of the intertwined UK and EU energy markets. On the other hand, having no deal is widely viewed as unfavourable for the sector. There will be no transition period and, as such, market participants will have to implement contingency plans immediately.
NO-DEAL |
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What to be aware of |
Further detail |
New Statutory instruments |
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The government expects consistency of supply |
Leaving the EU: implications for UK energy policy inquiry - publications |
Any rises in gas and electricity costs will be capped and reviewed on a 6 month basis |
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UK energy market participants trading in the EU will need to re-register with an EU National Regulatory Authority (NRA) before the Brexit deadline. |
Regulation (eu) no 1227/2011 of the European Parliament and of the Council |
The Withdrawal Agreement contains very few references to the energy sector. However, during the transition period the regulation applying to the energy sector will continue largely unchanged.
The Withdrawal Agreement does makes specific reference to Euratom-related issues (articles 79 to 85) and contains provision for the UK to meet with EU regulatory bodies (Article 128).
Written by Selina Hinchliffe and Andrew Douglas
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