Brexit, Energy Security and the Nuclear Industry

An interesting paper has been issued by the House of Lords, European Union Committee (10th Report of Session 2017–19, HL Paper 63, Brexit: Energy Security). This looks at the potential impact of the UK leaving the EU on the supply of electricity and gas. It finds that we may lose some of the market efficiencies we enjoy as a member and may have to make political concessions to retain some benefits, may have a accept higher prices for using interconnectors, and may be in a poorer position in the event of a continent-wide energy shortage.

There is a big uncertainty about the influence the UK will have on European energy policy when outside the EU and further debate about how, if at all, this will affect us. This theme was summarised by the statement that “Brexit can have severe long term implications for UK’s energy security if economically rational outcomes are not sought by both sides”.

From the point of view of trading electricity the EU does not seem to be a very good option for a trading partner. The report looks at the experiences of Norway and Switzerland. The EU seems to want to impose its own rules, not just the current rules but all future ones. To use the Norway model would be to lack any say in the rule making but to be a member of the EFTA, which the UK has rejected. Switzerland sits at the centre of Europe and has 40 interconnectors between it and the EU. Despite this it does not have the ease of trading electricity with the EU. Meanwhile, we are told that, “a study requested by the European Parliament’s Committee on Industry, Research and Energy concluded: “With or without the UK, the EU will be able to complete its market, to achieve its climate and energy targets with feasible readjustments, and to maintain supply security.”

On the energy security front, the committee worried that we would cease to benefit from “EU solidarity” so, if energy was in short supply the EU members would be more likely to share what was available between themselves rather than allow it across interconnectors to the UK. The report concluded that: “Post-Brexit, the UK may be more vulnerable to supply shortages in the event of extreme weather or unplanned generation outages. While we note the Minister’s confidence in future UK energy security, we urge the Government to set out the means by which it will work with the EU to anticipate and manage cross-continent supply shortages that will affect the UK”.

There is an important section on Euratom. It is stated that: “not only do nuclear power stations supply a significant amount of low-carbon electricity [20%], but the continuity of that supply helps balance less predictable renewable sources, providing further assistance to the UK in meeting its decarbonisation objectives”. I’m not sure that this is entirely true if you take it to mean that a nuclear reactor will immediately take up the load if the wind drops. Nuclear energy provides “baseload” supply. Nuclear power stations work best when providing a constant level of output – load following is possible but is not one of their strengths. What really balances the unpredictable renewable sources are the rapidly variable generators such as hydro, gas turbines and diesel units. Not all of these score highly on the decarbonisation test.

It seems widely agreed that leaving Euratom will have no effect on nuclear safety – that is covered by UK regulation and the ONR. However, without replacement of the controls on the import and export of nuclear material, including fuel, and the free movement of skilled workers becomes more difficult. Without at least some of the Nuclear Co-operation Agreements held by Euratom being replicated trade becomes harder.

ONR have been given the task of Safeguarding but have stated that “Establishing a system that seeks to replicate all aspects of the current Euratom regime by March 2019 is unlikely to be achievable. A system that seeks to meet our international reporting obligations, and which can then be further developed over time is a more realistic starting point and is what we are aiming to achieve by March 2019

In summary. We are leaving a club that distinguishes between “them” and “us” and we don’t know how much difference being a “them” rather than an “us” will make to our relationship with the EU or its member states. The European energy markets are not necessarily going to be open to us in the transparent way they are now. This means that the price of energy flowing between the UK and EU becomes a political question as well as a market question. The market becomes less efficient. Our place in the queue when the whole of Europe is lacking energy also changes for the worst.

Britain should have an energy policy that ensure that our lights stay on. The role of the EU member nations in that policy must not be taken for granted.

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