When it comes to energy, collaboration with the EU is imperative

Former Energy Minister, Michael Fallon MP commented in January this year, that whether you are a Leaver or Remainer it is in the long-term strategic interest of Britain that there is a genuine energy market across Europe. I’ll stay out of the Leave/Remain politics, but I will agree with his point regarding energy. Larger, integrated energy markets, whether on the island of Ireland or across Europe deliver tangible benefits for households and businesses alike. The rationale for a deep, comprehensive and collaborative energy relationship with the EU is not economic alone, but critical if we are to decarbonise our economy.

The UK and its energy industry is accustomed to not only managing, but leading change. This year the Climate Change Act turns a decade old, a remarkable cross-party achievement that put the UK at the forefront of international efforts to combat climate change. Policymakers and the energy industry are working to make the ambitions of that Act into a reality. And it is working. National Grid statistics reveal 2017 was the UK’s greenest year on record, and we enjoyed the first day since the industrial revolution where coal was not required for our electricity needs.

For me, the key principle of the new UK-EU energy relationship should be collaboration. The UK has not shied away from leading on climate change, and should continue to work with the EU in leading international efforts. Carbon pricing is a key and practical instrument, and the European Union Emissions Trading Scheme (EU ETS), is the largest emissions trading scheme in the world. Continued UK participation in the EU ETS following Brexit should be welcomed from all sides of the negotiation table.

I also believe the Single Electricity Market on the island of Ireland should be maintained and the Integrated Single Electricity Market Project should be completed. The combining of the Northern Ireland and Republic of Ireland electricity markets has been a success, and represented the first project of its kind, to operate with dual currency and across multiple jurisdictions. A suitable dispute resolution mechanism needs to be established to secure the long-term stability of the energy market between Northern Ireland and the Republic of Ireland.

Finally, the UK and EU should continue to collaborate on delivering large, ambitious energy projects for mutual benefit. The North Sea, which we perhaps associate more closely with the oil and gas industry, has unfulfilled renewable energy potential that should be harnessed. SSE is seeking to develop offshore wind farms in the Dogger Bank area of the North Sea, delivering nearly 4GW of power capacity. There is potential to connect and provide power between the UK, Germany, Denmark, Netherlands and Norway. Working with our European colleagues we can make the North Sea low carbon grid a reality. Schemes such as the Connecting Europe Facility and Horizon 2020 can provide support and funding opportunities for ambitious projects. So effective co-operation on energy between the UK and countries on mainland Europe can only help gets projects like this ‘off the seabed’. These are complex matters, but the sooner the parties to the negotiations on the future UK-EU relationship on energy are able to agree a way forward, the better it will be for efforts to take forward the next stages in decarbonising our economy.

Recently I travelled to Brussels to sign a pledge alongside my electricity industry colleagues across Europe. We pledged to invest in clean power generation, delivering more responsive, resilient and efficient energy systems. Energy systems that promote and enable customer participation in new and exciting ways. The pledge states clearly, the European electricity industry’s aim to become carbon-neutral well before mid-century. Whilst the Brexit settlement may have an impact in shaping the means for the UK to achieve this goal, there is a clear appetite from industry across Europe towards delivering for customers and wider society. It is now for negotiators on both sides to provide clarity on the long-term UK-EU relationship for energy. I hope it leads to the UK and EU moving forward, together, to realise our common energy goals.

About the author

Alistair Phillips-Davies Chief Executive

Alistair became Chief Executive of SSE on 1 July 2013. He has a degree in Natural Sciences and is a qualified Chartered Accountant. He has worked in the energy industry since 1997, when he joined Southern Electric. He was appointed to the Board of SSE as Energy Supply Director in 2002 and was appointed Deputy Chief Executive in 2012. As Chief Executive, he leads the Executive Committee and the rest of the SSE team in the day-to-day running and operations of SSE and is responsible for implementing the strategy and policy set by the Board.

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