Current state of play

  • Authorised UK firms can easily participate in the EU’s internal energy market. 
  • Much UK legislation comes from European directives or regulations. It is often complemented by network codices, which the transmission system operators compile as ‘regulated self-regulation’ in institutions such as the European Network of Transmission System Operators for Electricity (ENTSO-E) or the European Network of Transmission System Operators for Gas (ENTSO-G). 
  • Companies can run transmission systems, or can take a share in a transmission system operator, anywhere in the EU. To do so they only need meet the national legislative conditions, which are based on the requirements of the directive on common rules for the internal electricity market and the corresponding directive on natural gas.
  • Under the regulation on guidelines for trans-European energy infrastructure, projects of common interest that are implemented into the EU list are eligible for EU financial support. An accelerated permit-granting process applies to these projects.
  • Some member states are planning to install non-discriminatory capacity markets that should be accessible to all EU energy suppliers that meet the pre-qualification terms. The EU Commission has already authorised the UK capacity market.
  • UK firms with high carbon dioxide emissions, such as electricity producers and manufacturers, participate in the EU Emissions Trading System. They can buy or sell EU emission allowances, which allow them to emit certain quantities of carbon dioxide. The EU Emissions Trading System is a key instrument in meeting the reduction targets set out in the Kyoto Protocol, which the EU and its member states have ratified. 

What should I be thinking about now?

  • ENTSO membership
    • As a UK transmission system operator, will I still be a member of the ENTSO-E or ENTSO-G if Brexit happens?
    • How would EU-derived UK legislation be affected by a Brexit? Would the transmission network codices still apply? 
  • Projects of common interest and financial support
    • Will projects of common interest be removed from the EU list if they are linked to the UK?
    • As an investor, under what conditions will I have access to EU financial support if my investment in energy infrastructure is linked to the UK?
    • Will I have to refund any financial support given before a Brexit? 
  • Access to and operating transmission networks
    • As a UK energy supplier, will I have access to European transmission networks?
    • As an EU energy supplier, will I be able to access UK grids?
    • Would a Brexit affect any ongoing energy supply contracts?
    • As a transmission system operator that runs a transmission system in the EU, would I have to apply for a new certificate if my shareholder is a UK company?
  • Capacity markets
    • As an EU energy supplier, will I be able to take part in the auction process for the UK capacity market?
    • Will UK energy suppliers be able to take part in future capacity mechanisms in the EU?
  • EU Emissions Trading System 
    • What impact would a Brexit have on trading and transferring EU emission allowances between UK and EU companies? 
    • Will emission allowances held by UK firms still be valid if the UK leaves the EU?

The answers to many of these questions will depend upon the nature of a post-Brexit UK/EU relationship.