Posted on: 10/07/2018
The head of Energy UK has called on politicians not to “mess up our energy system” when the UK leaves the European Union (EU).
Lawrence Slade, whose organisation represents over 100 companies across the energy sector, said that the EU Emissions Trading System (ETS) was the most efficient way to decarbonise the economy and said that participating in the Internal Energy Market was “the best way forwards”.
He criticised the lack of information following last month’s European Council meeting and hoped the UK Government’s forthcoming white paper would provide some answers.
His comments came ahead of last Friday’s summit at Chequers, during which Prime Minister Theresa May agreed the UK’s Brexit stance with her cabinet.
Slade explained that the uncertainty surrounding Brexit was already affecting power companies, giving the example of whether the UK would remain within the EU ETS.
“Under the ‘Secure and Promote’ obligation, the largest market participants need to pledge to make a market in a certain amount of electricity capacity in order to help improve liquidity and market access for smaller and new entrant electricity suppliers,” he said. “This obligation will be extended to the winter period 2020-21 from 1 October.
“At present, as we do not know what carbon pricing mechanism the UK will be in, the exposure to carbon costs for that period is undefined which makes it extremely difficult to price any thermal generation and causes deep uncertainty across the market.
“Uncertainty creates risk and risk has a price. This situation is likely to create cost pressure that will feed through to customer bills.”
‘Crucial’ weeks ahead
Slade added: “The next couple of weeks must provide more clarity as to what the future looks like and for that reason I look forward to the publication of the Brexit white paper.
“Energy and climate are intrinsic to the success of our industrial base and our society and as such should feature highly.
“We believe the best way to preserve what we have created is to remain closely aligned with the EU framework, which supports our national efforts and the broader global ambitions.”