Here are highlights of the Chatham House’s report which delves into Britain’s energy future.
Chatham House, a think tank is of the opinion, it would benefit Britain if she were to remain in EU’s energy market and carbon trading scheme if Brexit negotiations aren’t concluded within the stipulated two year period.
Chatham House said Britain and the European Union are unlikely to finalise a deal on their future relationship within two years, as specified by EU’s Article 50.
The European Parliament has stated, if a deal is not reached by April 2019, a transitional deal will then be required for upto 3 years.
In that event, “the government should seek to maintain its current status within the internal energy market (IEM) and the EU’s Emissions Trading System (ETS) during the transition process,” reads a report from Chatham House.
The report also states, to stay in the transitional deal, Britain will have to comply with relevant EU energy, environment and competition rules as well as agree to a joint legislative framework for regulatory oversight and enforcement.
In April, Greg Clark, Britain’s energy minister stated it was in Britain’s interests to be part of the IEM, which coordinates access to energy across the EU, and expand interconnectors with other EU and non-EU countries.
The EU plans on tripling its electricity interconnection capacity by 2025 as it pushes for the adoption of renewable energy sources and replace its aging coal and nuclear power plants.
According to various estimates, Britain stands a chance to save hundreds of millions of euros if it were to collaborate in this expansion of interconnector capacity with the EU up to the 2020s.
When Britain finally leaves the EU, although it will still be connected to the European market, the extent of its integration however will be unclear, states the Chatham House report.
As a possible option to go forward, Britain should ensure continued cooperation with the EU and non EU-members so as to either form a new pan-European energy partnership or enlarge the existing European Energy Union.
“In particular, such a partnership could offer a useful platform for aligning EU policies with those of third countries, including the UK, Norway and Switzerland, while allowing them to fully access the IEM and push forward common initiatives,” reads the report.
Although it is very likely that once Britain leaves the EU, it will have to leave behind the ETS, which charges power plants and factories for every tonne of carbon dioxide they emit, since she seeks to end the European Court of Justice’s jurisdiction over her, nevertheless, it is in Britain’s interest to remain to be part of the ETS for at least 2020, since setting up a separate scheme on her own would not only be overly complicated but a very expensive affair as well.
The Chatham House report also suggests that Britain should consider adopting carbon tax.